Identifying financial success factors for SMMEs in the Eastern Cape

In March 1995, the South African government formulated the White Paper for the development and promotion of small business in South Africa to foster an environment in which small and medium enterprises could operate. SMMEs play an important role in job creation in South Africa. The survival of SMMEs is reliant on the abilities of the entrepreneur to succeed. An entrepreneur’s abilities and knowledge plays a very important role in the assessing process when applying for finance. There are various financial institutions in South Africa that have different criteria and turnover requirements to assess such applications. Financial institutions include banks, funds and privately owned institutions. The purpose of this study was to identify the financial success factors for SMMEs in the Eastern Cape. During the study, 32 success factors were identified. The most important factors amongst these include financials, knowledge of management, competition / market, past conduct of banking account, source of repayment, purpose, business ability / product, collateral, capital and industry risk / knowledge. These findings resulted in the various recommendations, as well as suggestions for further research opportunities