Financial challenges faced by SMMEs in Gauteng South Africa

Small, medium and micro enterprises (SMMEs) are not spared from the global economic and financial turmoil which periodically occurs worldwide and therefore they must adjust their financial needs to accommodate such dynamic phenomena. This is particularly relevant in developing countries such as South Africa. It is important to note that SMMEs are major contributors to the economy, as they provide employment opportunities and create economic wealth resulting in the reduction in poverty and increased employment. In order to succeed and prosper, SMMEs need to establish a sound financial management function, and therefore it is vital to investigate the financial challenges these firms are experiencing. This paper reveals a better and deeper understanding of the issues surrounding the financial difficulties encountered by SMMEs in the Gauteng Metropolitan area. The data used in the study was gathered by administering structured questionnaires to businesses within Gauteng, selected randomly through a probability sampling method. The analysis of the results was based on descriptive statistics arrived at through SPSS tools. The results indicated that most SMMEs in the Gauteng Metropolitan are not supported adequately especially in the areas of financial management skills and expertise. Recommendations were made for firm owners to have workshops and proper training on the financial matters. A one stop shop centre for SMMEs to have access to financial information and support as well as remedial action on policy matters was also recommended