Exploring the role of financial capital in SMMEs in Gauteng

Abstract

Master of Business Administration, North-West University, Vanderbijlpark CampusSmall, Micro, and Medium Enterprises (SMMEs) play a critical role in economic growth and development, yet many struggle to access the financial capital needed for survival and expansion. This study explored the role of financial capital in SMMEs in Gauteng, focusing on the challenges and opportunities related to accessing financial support. Using a qualitative approach within an interpretivist paradigm, semi-structured interviews were conducted with four purposively selected SMME owners from the manufacturing, construction, human resource recruitment, and financial services sectors. Data was analysed thematically using ATLAS.ti to uncover key insights.The findings reveal that complex statutory requirements, lack of collateral, and risk-averse financial institutions hinder access to financial capital. Compliance with tax regulations, accurate financial record-keeping, and maintaining creditworthiness emerged as vital strategies for overcoming these barriers. Additionally, participants demonstrated resourcefulness by leveraging alternative financing options such as personal credit and supplier financing. Limited access to financial resources was found to significantly impact SMME survival, operations, and growth. The study concluded by recommending management practices and policy interventions aimed at enhancing access to financial capital. These findings highlight the potential of improved financial support to unlock growth opportunities for SMMEs and contribute to their long-term growth. This research provides actionable insights for policymakers, financial institutions, and SMME stakeholders, emphasising the importance of targeted support to empower this vital sector