SMMES in South Africa: Understanding the Constraints on Growth and Performance

Haroon Bhorat, Zaakhir Asmal, Kezia Lilenstein and Kirsten van der Zee (haroon.bhorat@uct.ac.za)
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Kirsten van der Zee: University of Cape Town

Working Papers from University of Cape Town, Development Policy Research Unit

Abstract: Small, Medium and Micro Enterprises (SMMEs) have been identified as a key component to advancing inclusive growth and development in South Africa. This paper serves to present a snapshot of the current profile of SMMEs in South Africa as well as the key inhibitors of growth for SMMEs. We provide a comparative perspective of the role of SMMEs and entrepreneurship in South Africa, then profile the current landscape of SMMEs in South Africa, evaluating the characteristics of SMMEs across three dimensions: firm, owner and employee characteristics. Following this, we distinguish between formal and informal SMMEs in order to highlight the unique nature of informality in South Africa. This paper also evaluates the endogenous and exogenous impediments to growth faced by South African SMMEs. Endogenous challenges are internal to the firm while exogenous challenges are external to the firm. In summarising these findings, we present the major challenges inhibiting the growth of SMMEs in South Africa, taking into account firm heterogeneity in terms of both firm size and informality status.

Keywords: SMMEs; South Africa; inclusive growth; development; entrepreneurship; informality (search for similar items in EconPapers)
JEL-codes: E2 E26 J26 J4 J46 O1 O17 O4 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2018-07
New Economics Papers: this item is included in nep-cse, nep-ent, nep-iue, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published in Working Paper Series by the Development Policy Research Unit, July 2018, pages 1-52

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