SMME access to funding: challenges experienced by SMMEs in uMzimkhulu Municipality.

Master of Commerce in Leadership Studies. University of KwaZulu-Natal, Westville 2015.The purpose of this study was to investigate whether or not the SMMEs in the area of rural UMzimkhulu Municipality do access funding from the banking institutions as well as other funding organisations, government and agencies. This research looked at the challenges they have in accessing the funding for both start-ups and business development. The research method used was qualitative and interviews conducted from a sample of SMMEs in UMzimkhulu. These challenges are viewed as possible reasons why most SMMEs are failing as a result of financial difficulties and therefore should be investigated. This kind of situation persists despite the available support by government who developed policies and strategies for support. As a result of these policies, development bodies such as DTI, SEDA and Khula enterprises and other government departments (Economic Development) in the provinces and locally (LED) to assist and give support to SMMEs. It is intended that the study of SMME challenges in relation to finance access will provide recommendations to improve their livelihood and life cycle of these businesses. The research findings highlight some of the challenges for SMMEs such as those of being unable to provide some of the requirements of funding bodies. Furthermore, the funding bodies were found to favour those businesses that were already doing well over smaller, fledgling or struggling businesses which required funding to continue their operations. The research also found that most SMMEs do not access funding that is available because they do not know of the funding available from government agencies and also because the offices for these institutions are based in big cities far away from them. The findings from this research can be used to assist in policy development and turn-around strategies in the funding of the SMME sector. It will also potentially contribute towards addressing the challenges faced by SMMEs in other rural areas as it will reflect challenges not only in UMzimkhulu but also similar rural areas. The research also highlights the recommendations and scope for further research