Analysis of financial management practices in Small, Medium, and Micro Enterprises (SMMEs)

Ndivhuwo Sirembe and Freddy Munzhelele
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Ndivhuwo Sirembe: University of the Free State
Freddy Munzhelele: University of Venda

International Journal of Business Ecosystem & Strategy (2687-2293), 2025, vol. 7, issue 3, 362-369

Abstract: This paper investigated the financial management practices among Small, Medium, and Micro Enterprises (SMMEs) in the Thulamela Local Municipality using a qualitative approach. The research focused on a sample of forty-eight respondents from the informal sector, which was deemed representative of the SMME landscape. Interviews were conducted with SMME owners, guided by an interview framework, and recorded for transcription and thematic analysis. Findings revealed that competition is perceived as the primary cause of business failures; however, inadequate financial management emerged as a significant underlying issue. The study emphasizes the urgent need for intervention from government, banks, and academic institutions to offer financial management training and improve access to funding for SMMEs. Recommended actions include the establishment of workshops and seminars designed to enhance financial literacy among business owners. Such training would provide them with essential accounting and budgeting skills, ultimately enabling them to meet loan requirements from financial institutions and reducing the risk of cash flow issues and business failure. Key Words:SMMEs, Financial Management Practice, Informal Sector, Competition, Business Failure, Financial Literacy

Date: 2025
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