Acta Universitatis Danubius. Œconomica, Vol 15, No 1 (2019)

Abstract

For the enterprise development policies to be applied there is a need to understand the real factors that can propel it. Entrepreneurial thriving among Small, Micro and Medium Enterprises (SMMEs), informal sector as well as cooperatives in South Africa, need support in order to grow, create employment and meaningfully contribute to the development of the country. This article reports on the findings from a baseline study conducted in the Gauteng Province on the general state of SMMEs, informal sector and cooperatives. Specifically, the article aims to profile those SMMEs, informal sector and cooperatives, as well as to identify their basic needs that should be addressed by relevant stakeholders for their survival and growth.  

In South Africa, SMMEs, informal sector and cooperatives, remain the cornerstone for the survival of thousands of South Africans, both in rural and urban areas. Generally, the classification of those businesses in the correct categories in order to qualify for subsidy or sponsorship poses a lot of challenges, especially in the big conglomerations (Johannesburg and Pretoria) of the Gauteng province.   In South Africa as well as in many other parts of the world, the classification of the SMMEs remains incongruent due to a number of factors, including the size of the countries’ economies, the differences in the business environment as well as their changing conditions. A research team met to discuss the design of the study, and descriptive data were collected in order to provide a good understanding of the sampling units. A sample of 1000 SMMEs, informal sector and cooperatives, was used to carry out the study. Purposeful and convenience sampling methods were used to select the respondents. A questionnaire was designed, then sent to the Gauteng Department of Economic Development (GDED) to ensure that all the necessary profiling data was captured before its usage. The questionnaire was filled by the respondents with the presence of the field workers. A company called STRATKON was used to handle the data inputting and the SPSSX was used to analyze it. The study found that the current definition of SMMEs, according to the 1996 Act, makes it difficult to know the real identity of these businesses; hence, it suggested different categories and presented other features apt to rightly direct the aid and support towards these businesses. Recommendations to various and relevant stakeholders were formulated.