The global economy is still recovering from the effects of the sub-prime crisis. The economic downturn has created international tax policies that seem to encourage debt funding. Some commentators are of the view that debt and equity should have a uniform tax treatment. South Africa has not escaped the aftermath of the economic meltdown and had three credit downgrades since the second half of 2009. The first objective of this treatise was to determine whether loan funding still has a role to play in a SME environment. This was considered in the context of interest-free or low-interest rate loans advanced by companies to shareholders or other connected persons and interest-bearing loans due by companies that in substance clearly have equity features. The primary enquiry pertaining to debit loans is whether the debt arose by virtue of any share held in the company. It is submitted that a causal connection is required between any share in that company and the advance made. Where a company parts with funds for no quid pro quo a deemed dividend in specie is triggered. Conversely, where a loan was made on commercial grounds the company will not be in breach, even if the loan is interest-free. A loan that lacks a reasonable redemption period is more akin to equity and to this extent a deemed dividend will be triggered where a loan owing by a company to a shareholder or other connected person is not redeemable within 30 years. There is ambiguity with regards to the inception of the 30-year period for pre-existing loan agreements. Taking the contra fiscum rule into account, it is submitted that the 30-year period should only commence from the effective date due to the impracticalities involved and because the concept of an ‘instrument’ did not previously exist. It is submitted that shareholder and other connected person loans are not by default equity, to the extent that the transaction is on commercial grounds and in substance a loan. It is further submitted that loan funding still has a role to play in a SME environment and that South Africa has no need for uniform tax rules pertaining to debt and equity, due to the anti-avoidance provisions highlighted above. The poor state of the local economy prompted Treasury to introduce new debt relief rules to assist distressed debtors. The second objective of this treatise was to analyse whether the new rules will provide tangible relief to distressed debtors as this was one of the short comings of the previous system. It is submitted that the new ordering rules delay the incurrence of an immediate tax as trading stock held and not disposed of, the base cost of an asset or the balance of an assessed capital loss is first reduced compared to the old rules where it instantly triggered a recoupment or a deemed disposal for CGT purposes. Tangible relief is provided to distressed debtors as a tax debt reduced has no normal tax consequences. This provides an opportunity for companies under business rescue because SARS rank on par with concurrent creditors. As a result, the tax debt reduced is likely to be higher under business rescue than liquidation.

Thesis (MTech (Cost and Management Accounting))--Cape Peninsula University of Technology, 2015. / The broad aim of this research was to investigate the working-capital management practices of Small Medium and Micro Enterprises (SMMEs) in the Cape Metropole. The study was motivated by a lack of research on the workingcapital management practices of SMMEs. Data was collected by means of a questionnaire that comprised closed-ended questions. The findings of the study indicate that most SMMEs manage their cash effectively; however only a minority hold cash for speculative purpose, invest their surplus cash profitably and use computers to manage cash. By contrast, only a minority of the SMMEs sell on credit. Of those that do, only a minority review their credit criteria annually, send reminders to debtors, charge interest for delayed payment, send prompt statements and use computers to manage their receivables. Likewise, only a minority of the SMMEs purchase on credit. Of those that do, a majority pay promptly to take advantage of discounts and thus only a minority settle their accounts on the last date allowed. Interestingly, most of the SMMEs that purchase on credit use computers to manage their payables. Only a minority of the SMMEs perceive a lack of skills, resources, personnel and time as factors that inhibit them from managing their workingcapital effectively. The findings of this study provide invaluable insights on the weaknesses in the working-capital management practices of SMMEs, which could be used to inform future endeavours of the Government when establishing interventions meant to improve the survival rates of these entities. The findings may also assist SMMEs to gauge and review their working management practices, particularly their receivables and payables, with a view to optimising the benefits derived from these components of working-capital.

Submitted in fulfillment of the requirements of the Master of Information and Communications Technology Degree, Durban University of Technology, Durban, South Africa, 2017. / The research reported in this dissertation focuses on the development of a web-based frugal information system (frugal IS) which supports financial management of very small enterprises (VSEs), with a special focus on their business transactions. In most developing countries, VSEs have some significant contributions at various socioeconomic objectives, such as fostering entrepreneurship and improving growth of employment. They represent an income opportunity to retrenched and retired entrepreneurs which is recognised to be crucial to the livelihood of many poor local households and local citizens. In addition, these enterprises have a remarkable role to play in the areas of employment and poverty alleviation. Despite this, the majority of VSEs in developing countries, especially those in rural regions are faced with miscellaneous issues and challenges, which could be ascribed to their resource scarcity. In particular, most VSEs are resource-constrained in terms of knowledge and information resources, financial resources and human resources. What also exacerbates their situation is the fact that the majority of VSEs are still ingrained in their traditional ways of running the business and they are unready to adopt new and innovative working methods. In particular, VSEs are still accustomed to manual paper-based systems which are monotonous, error-prone, highly fragmented and severely inefficient. Unfortunately, all this gravely challenges the growth and development of VSEs. In this dissertation, a concept of frugal innovation, precisely frugal IS, is applied to distinctively address specific and unique business needs of VEs in developing countries. A methodology that is employed in this research is called design science research methodology (DSRM). The DSRM helped to address the problem of VSEs through design, construction, utilization and evaluation of a web-based frugal IS prototype system. A novel system life cycle model that favours the notion of frugality was employed for the design and development of a web-based frugal IS. The evaluation of the prototype system and its design revealed quite interesting results. The design of a web-based frugal IS prototype system was characterized with low complexity which promoted reusability, maintainability and reliability. The evaluation of usability indicated that the system was fairly simple to use, reliable and effective in terms of managing financial information of VSEs. Based on the general findings of this research, the design and development of a web-based frugal IS for VSEs in developing countries promises to assist VSE owners to assess their profitability, improve their financial management, promote sound economic decisions and help them to avoid business failure. / M

This research is a diagnosis of the supply side of SME (small and medium enterprises) credit. Its objectives are to determine the current level of bank lending to SMEs to validate the financing gap, to explore the strategies and mechanisms employed by banks to provide tailor-made lending for SMEs and finally to conclude by identifying some of the key challenges the banks face in their quest to lend to SMEs. This, then, culminated in some recommendations for increasing bank funding to SMEs. This study employed a deductive qualitative research.. The research used a non-probability, purposive/judgmental sampling method to choose the heads of bank SME units to include in the research. There are twelve banks with dedicated SME units, out of a total of 18. The researcher carried out in-depth face to face interviews using semi-structured questions. The qualitative data was coded, deductively analysed and conclusions drawn and incorporated into a report. Banks’ most outstanding challenges in dealing with SMEs in terms of information asymmetry, an unsupportive business environment, poor quality of SME clients and inflexible regulatory requirements.

D.Ing. / During the last pre-millennium decade South African engineers were involved mainly in military product development. The downscaling of development within the military arena, forced the engineering as well as other industries to refocus on commercial product development and marketing (the engineers in the military environment were not the only ones influenced by the change in the economic climate. Many others were also affected, but for the sake of explanation, the military environment was used). This stage led to the creation of various small- to-medium enterprises (SMEs), which were set up by creative, determined engineers and entrepreneurs. However, by the latter part of the last decade, these initiatives ended sadly in the liquidation of quite a number of companies. These ongoing liquidations are a result of various aspects, such as cash flow restrictions, growing currency value and a low national- growth figure. The research done in fulfilment of this thesis, addresses some of the events of the last decade and offers general, practical suggestions on how to overcome some of these hurdles within the current economic climate. It illustrates that experience enables an entrepreneur to develop methods and provide suggestions on how to create, establish, survive and grow within a high-technology driven SME. Shortfalls, methods and products are discussed by means of case studies. The products discussed in the thesis, are all classified among the field of mobile, portable and static electronic power-conversion. Thirty high-technology companies participated in a survey in support of the research statements. As a summary, it is shown that various aspects often restrict new product development (NPD) for SMEs. Optimum and effective usage of knowledge and experience in areas of technology, marketing, human resources, organisational, operational, manufacturing and financial management is required to achieve goals successfully and to survive in today’s industry. An investigation was done to determine the relationship between these interdivisions of an SME. In conclusion, methods and models are presented to optimise the techniques that are currently used within SMEs. These techniques are then further expanded on and presented as guidelines for business discussions. Practical examples are presented in support of the actual models.

Internationally, in both developed and developing countries, it has been accepted that SMMEs are the backbone and the driving force of economic growth and job creation. In South Africa, SMMEs account for approximately 60 per cent of all employment in the economy and more than 35 per cent of South Africa's Gross Domestic Product (GDP) (Ntsika, 1999:38; Gumede, 2000:67 and Berry et ai, 2002 in Kongolo, 2010:235). SMMEs are often the vehicle by which the lowest income people in our society gain access to economic opportunities. The sector represents 97.5 per cent of the total number of business firms in South Africa and that it contributes 42 per cent of total remuneration. SMMEs account for some 3.5 million jobs and have between 500 000 and 700 000 businesses (Abor and Quartey, 2010:2337). Due to the above-mentioned contribution, the South African government initiated a number of SMME support programmes aimed at promoting, growing and developing the SMME sector. As a result, a number of national government agencies such as the National Youth Development Agency (NYDA), Khula Finance Limited, the National Development Agency (NDA), the Small Enterprise Development Agency (SEDA) and many other national , provincial and local government organizations were established post 1994. However, despite the concerted efforts by government to develop the sector, SMMEs are, after 17 years of democracy, still faced with enormous challenges such as access to markets, information, appropriate technology, finance, to mention but a few. Of the above-mentioned challenges, access to finance is on top of the list of these. This study, therefore, is aimed at investigating external, institutional and internal constraints impacting on SMME access to finance in the Buffalo City Metropolitan Municipal area. The study is also aimed at ascertaining which of the abovementioned constraints have the greatest influence to SMME access to finance. In developing the framework of the study, recent empirical research conducted around the country and internationally on constraints influencing SMME access to finance (Bbenkele, 2007:18; Ganbold, 2008:45; Mahadea and Pillay, 2008:99; Chenesai, 2009:135; Zindiye, 2009:78; Fatoki and Garwe, 2010:2765; Pandula, 2011 :257) was drawn upon. In order to meet the objectives of the study, a simple random sample survey of 50 SMMEs in the Buffalo City Metropolitan Municipality (BCMM) jurisdiction was conducted. The profile of the SMMEs was very similar to that of other studies that focused on constraints to SMME access to finance. A structured questionnaire was used to collect data from SMME owner-managers and a response rate of 60 percent was achieved . The results of the study indicated that the high cost of credit and interest rates and Value Added Tax (VAT) registration were the key external factors that impacted on SMME access to finance. Generally, SMMEs are viewed by lending institutions as high risk category. Therefore, even though interest rates have come down significantly, the cost of credit and interest rates still remain a constraint. The study also found that even though the South African Revenue Services (SARS) has increased the VAT threshold to R1 million (South African Revenue Service, 2007: 29), SMMEs still struggled to register for VAT. With regards to the institutional factors, the study revealed that ineffective support services provided by private and public SMME support agencies, the lack of communication of these services (access to information) and the lack of the subsequent follow-up services were the key constraints to SMME access to finance. The results of the study indicate that those firms with good track record, high annual turnover, sophistication and diverse skills, good credit record, good cash flow, proper financial records, bankable and viable business plans, collateral and registered for VAT were more likely to have access to finance than their counterparts. The main conclusion of the study is that the internal factors turned to have the greatest influence to SMME access to finance. However, there is more to be done by private and public SMME support agencies and lending institutions to address the above-mentioned institutional constraints which have a negative influence to SMME access to finance. It is recommended that more in-depth empirical research be conducted on the support services provided by private and public SMME support agencies in terms of the services that they offer the effectiveness of the services and how these are communicated to potential customers. It is also recommended that training workshops aimed at addressing the intemal constraints identified be conducted. Also recommended is the development and implementation of sector-specific mentoring programmes for the owner-managers. Strategies to improve the awareness of support services provided by SMME support agencies need to be developed. This would ensure the effective use of these services by SMMEs. It is also recommended that SMME support agencies and lending institutions staff be trained in order to better understand and be more responsive to the owner managers' needs. Linkages with tertiary institutions in planning and conducting the training needs to be made.

The research problem addressed in this study was to provide a planning guideline for Small, Medium and Micro Enterprises (SMME’s) to assist them to plan more effectively and be sustainable in their businesses. A guideline for planning is needed, as planning is one of the most difficult activities a business owner needs to undertake. Yet it is essential to do because, before taking action, you must know where you are going and how to get there. Well-developed plans can assist the business owner to interest banks and/or investors to invest in the business, guide the owner in operating the business, give direction to and motivate employees, and provide an environment to attract customers and prospective employees. To become an effective business owner, one must look ahead. Planning, which is the process of setting objectives and devising actions to achieve those objectives are imperative to be sustainable in business. The findings of the literature survey clearly highlights the reasons why a business owner needs to plan and provide a guideline how to plan. It was found in the empirical study that Standard Bank rate the SMME market as a very valuable part of their business. The SMME market has a benefit to various departments within the bank, not only the SMME business market. The empirical study also found that not every entrepreneur that holds a business plan is successful. Many reasons for this exist. One aspect that was identified, is that the wrong idea was implemented. The empirical study revealed that in all respondents agreed that planning forms an integral part of the entrepreneurs business. The empirical study found that a business plan will assist the entrepreneur to be sustainable in their business, only if a thorough feasibility study was conducted. The respondents agreed that the feasibility study, will either support or contradict the assumptions made in the business plan, this will assist the entrepreneur to decide to either continue or end the business activity. It was found that the entrepreneur, with especially a financial expert should be involved when a business planning is undertaken. Other experts in the various business arenas should also be requested to assist with the setting up of the business plan.

A great deal of taxpayers’ money has gone to a lot of SMME development initiatives. Despite this effort over the past 17 years, South Africa (SA) lags behind other developing countries, in promoting the growth and sustainability of SMMEs. The impact and achievements of government initiatives have fallen disappointingly short of aspiration (Business Development in South Africa. 2009. Occasional paper). Aims and Objectives: •To evaluate and reflect on the OR Tambo District Municipality SMME funding model and establish whether it has made the desired impact. •Determine if funds that have been channelled by the SA government to SMMEs for business expansion, start-ups, grants, and special industry development have yielded quantifiable results and •Assess the private funding institutions in assisting destitute entrepreneurs in the OR Tambo District municipality. Research methodology: The study was conducted using qualitative research and a questionnaire was used as a data collection tool. The researcher was able to get valuable information on stakeholders in the SMME sector. The stakeholders (SMMEs and funders), formed the core research sample. Results: findings suggest that the OR Tambo Municipality has a funding gap and the current funding model both from public and private funders is not effective in developing SMMEs in the municipality. The overwhelming majority of SMMEs agreed that there is a funding gap between funders and enterprises that seek funding in the ORTDM. “Financing gap” terminology, Underhill Corporate Solutions (UCS) (2011:52) defines it as, ‘a sizeable share of economically significant SMEs cannot obtain financing from banks, capital markets or other finance suppliers.’ About 90 percent of the interviewed SMMEs agreed that there is huge funding gap and 10 percent disputed this and said that there is no funding gap; rather, it’s a funding mismatch between the funders and SMMEs which needs to be tackled by all SMMEs stakeholders. The funding model needs to be revamped so it can also be accessible to start-ups, the unemployed, people with less business management experience and limited skills, and to all sectors of the economy. Various recommendations and suggestions for further research are made based on the research findings. Conclusion: The study has shown that the current SMME funding model is not effective and does not assist in developing SMMEs in ORTDM. The research findings depict the funding plight of SMMEs in South Africa; the SMME plight in ORTDM is more real than imaginary. 70 percent of SMMEs expressed less confidence in government SMMEs agencies in terms of assistance. The bigger portion of SMMEs felt that the funds channelled to government agencies were not providing significant assistance in developing SMMEs in ORTDM. Recommendations: The conclusive response from the sample, reflect structural challenges in the current funding model. About 70 percent of funding institution`s officials said “yes”, the low yield on SMME growth is a matter of funding. The funds which were meant to fund SMMEs for one reason or the other do not reach SMMEs which are looking for funding. Hence the funds channelled in the sector in the last 17 years have not yielded the desired results. 40 percent interviewed government officials conceded that there is serious political meddling in funding SMMEs in the whole province and ORTDM could not be an exception to this rule. 80 percent of interviewed SMMEs in ORTDM said funding was their main problem, and the other 20 percent indicated that their problem was not a matter of funding. The public and the private sector must revise the current funding model or devise another funding model that will: •bridge the existing current funding gap, •distribute the SMME allocated budget and achieve maximum efficiency in budget allocation.

Even though many organizations invest in IT, the value that IT is expected to contribute is still not clearly understood. Researchers agree that IT has become a crucial element to business operations and business existence. However, while there is continued investment in new information technologies and systems, organizations are not certain whether significant value is derived from IT investments. The failure to realize good return on IT investments is ascribed to a lack of understanding of IT by organizations and also the failure by organizations to align IT strategies with business strategies. The lack of alignment leads to the failure to match the right IT to the correct task, which leads to the poor application of systems and poor allocation of human resources to tasks. Therefore, organizations such as Small and Medium Enterprises (SMEs) in particular Boutique Hotels, are noted for their failure to derive better IT value. Their unique characteristics are understood to be influential in the way IT is used and managed by affecting the delivery of value from technology. In order to enable Boutique Hotels to derive more value from IT, the IT governance frameworks, Val IT and CobiT (ITGI, 2007), were examined as these integrate good practices to ensure that an organization‘s IT supports the business objectives. In addition, the Task Technology Fit (TTF) (Goodhue and Thompson, 1995) and Gap Analysis (Heeks, 2001) theories were highlighted as these prescribe the platform ideal for more value to be derived from IT. The current status of Boutique Hotels in Buffalo City was assessed through the use of questionnaires and interviews. The collected data was analyzed and resulted in the development of a model that can be used by Boutique Hotels in order to derive more value from IT and to maximize the use of IT.

Small and medium enterprises (SMEs) are very important to employment creation, poverty alleviation and the sustainable economic development of a nation. Encouraging SMEs, especially start-ups is crucial for sustainable economic growth. However, the failure rate of start-up SMEs in South Africa is one of the highest in the world. In reviewing the literature of the causes of the failure of start-up SMEs, access to finance emerged as a prime challenge. Start-up SMEs find it very difficult to obtain external finance from commercial banks and venture capitalists. The national and provincial governments in South Africa have realised that access to finance is a major constraint to the growth and survival of start-up SMEs and have put in place certain measures to improve access to finance by start-up SMEs. One of the primary measures put in place by government to improve access to finance by start-up SMEs is the provision of Business Development Service by some government agencies. This research investigates the role of Business Development Services Providers (BDSs) in improving access to finance for start-up SMEs. Questions arise as to why the failure rate of start-up SMEs is high in South Africa despite all these government measures aimed at assisting start-ups to access finance. Empirical research was conducted to investigate the role of BDS in improving access to finance by start-up SMEs. The instrument used for data collection was the self-administered questionnaire. The statistical analyses included descriptive statistics, T-test, ANOVA, correlation and regression analysis. The Cronbach‟s alpha was used as a measure of reliability. The results of the study revealed that: Access to finance is still a major problem hindering the survival of start-up SMEs. There is a lack of awareness of BDS providers and their services by the majority of start-up SMEs. There is a significant positive relationship between the use of BDS by start-up SMEs and success in accessing finance. Start-up SMEs that are aware of BDS do make use of the services. The results suggest that BDS are important to improving access to finance by start-up SMEs. However, there is a need to build awareness and encourage the use of BDS by start-up SMEs to improve their access to finance and ultimately increase their chances of survival.