SMMEs play an integral role in economic growth and development in both industrialised and developing countries by creating new jobs. It is therefore necessary to help them set up and expand their operations, develop new products, and invest in new staff or production facilities through allowing them access to finance. Access to funding remains a key aspect in SMME development and growth and in South Africa this still remain a problem. Small businesses, but particularly micro businesses, often do not fulfil the criteria to obtain the required amount of debt finance for longer-term growth. Typical problems are the lack of appropriate collateral, excessive outstanding debt and lack of proven business skills. For business people to obtain an unsecured loan solely on the strength of their character requires a major leap of faith on the part of the creditor. The Global Entrepreneurship Monitor (GEM) report of 2009 states that many entrepreneurs complain that there is lack of access to funding in South Africa. However, the country is no worse off with this issue than other developing countries. The report also mentions that often the entrepreneurs applying for funding are under prepared and do not provide sufficient relevant information. South Africa has a number of funding institutions and they include micro–financiers, banks, venture capitalists (VCs) and government–supported institutions which include Khula, the National Empowerment Fund (NEF) and the Industrial Development Council (IDC).
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This study looked at the perceived impact of the human capital of the SMME’s founder in accessing funding and if access to funding is perceived to have a positive impact on SMMEs’ growth. The perceived impact of the human capital of knowledge, formal education and expertise in attracting external funding and enhancing the growth of SMMEs was explored using the human capital theory framework. This exploration was done by testing the attitudes of 68 entrepreneurs. Descriptive and inferential statistics were used to analyse the data and to test the hypotheses. The results indicated that accessing funding is positively related to the SMME’s growth. In terms of human capital factors, the results indicated that knowledge, education and expertise are all perceived to be very important in accessing funding. Knowledge rated the highest in terms of the factors important in accessing funding. The study did not establish any relationship between the demographics of the SMME and the perceived importance of human capital factors in accessing funding. The study discusses the implications of the finding for funders and policy–makers. This study was simplistic in that it focused only on the perceived impact of human capital factors in accessing funding rather than all other factors as discussed in entrepreneurship theory.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/12598 |
| Date | 22 March 2013 |
| Creators | Matshekga, Malose Jonas |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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