Entrepreneurialism: Africa in transition

The impact of poor quality municipal services on small enterprises

“…Lack of capacity in business incubation programs that are financed and rolled out by SEDA is a key barrier in start-up enterprises that need hands-on assistance, coaching and mentoring on running SMMEs efficiently. Findings reported by Khale (2015), Marivate (2014) and Edoho (2015) indicate that the current high failure rate among start-up SMMEs in and around Tshwane is attributed to inefficient municipal services, overregulation, unnecessary bureaucratic procedures, lack of transparency, lack of good governance, lack of efficiency in the administration and management of license applications, inability to assess and evaluate tax, lack of entrepreneurial skills, lack of accounting and auditing and bookkeeping skills, inability to draw up business plans, inability to make oral presentations, inability to network with business rivals and competitors, difficulty in securing loans from commercial banks and microlending financial institutions and lack of infrastructure. This report is based on one of very few longitudinal studies that have been conducted in the Tshwane region of Gauteng Province in South Africa for assessing the impact of poor municipal service delivery on the viability of start-up SMMEs.…”

“…Although it is generally accepted that growing the SMME sector of the economy is vital for the alleviation of poverty and unemployment, the support provided to the sector since April 1994 has been grossly inadequate (Marivate, 2014). Edoho (2015) has reported that one of the most basic needs of start-up enterprises is the efficient delivery of municipal services. However, Khale (2015) and Marivate (2014) have pointed out that the current high failure rate among start-up enterprises is attributed to inefficient municipal services.…”

“…However, Khale (2015) and Marivate (2014) have pointed out that the current high failure rate among start-up enterprises is attributed to inefficient municipal services. Edoho (2015) and Brownson (2014) have found that inefficient municipal services, overregulation and lack of management, as well as financial skills constitute some of the key barriers to growth and profitability in small businesses. Henrekson (2014) has shown that development assistance programs provided to small enterprises by SEDA are not tailor-made to the needs of SMMEs.…”

“…Marivate (2014) has found that financial and nonfinancial assistance programs that are offered to start-up business enterprises are poorly financed, monitored and implemented. The South African SMME sector is characterized by lack of entrepreneurial skills (Edoho, 2015;Worku, 2014;Seeletse, 2012;Asah, Fatoki & Rungani, 2015), over-regulation (Shree and Urban, 2012), too much bureaucracy (Henrekson, 2014), difficulty in securing loans (Brownson, 2014) and poor municipal services (Khale, 2015).…”

“…Marivate (2014) and Khale (2015) have reported that start-up SMMEs in and around Tshwane do not benefit significantly from financial and non-financial assistance provided to them by the South African Small Enterprises Development Agency (SEDA). Brownson (2014) and Edoho (2015) have reported that over-regulation, too much bureaucracy and failure in incubation programs rolled out by SEDA are key obstacles to profitability in start-up SMMEs operating in the various parts of Gauteng Province including Tshwane. The purpose of the study was to assess the strength of association between sustained viability in SMMEs and the provision of quality municipal services to small businesses operating in the various parts of the City Zeleke Worku, 2016.…”