The challenge of development in South Africa is to increase employment, broaden distribution of wages and enhance skills of all workers, but particularly those workers disadvantaged by apartheid. The high unemployment rate and unemployability of a large section of the population, self-employment through small business presents the only realistic solution. But successful start-up and sustainability of such enterprises requires readily available access to robust and effective microfinance and business support programmes. This research studied SMME access to state and commercial financing vehicles and how this impacted on their growth prospects. The results from case studies show pervasive lack of access to finance by the SMMEs and that business start-ups and cash flows are financed mainly from savings and, to a lesser extent, from simple instruments, such as bank overdraft; While these kinds of financing have led to increased stock carrying and modest revenue growths, it has led to neither expansion of business nor significant increases in employment. Although the results show that banks have made big strides in reaching out to previously excluded and unbanked consumers and that they are more visible to the SMME than state institutions, the business owners show high levels of risk and debt aversion by not taking advantage of available SMME focused loans offered by the banks. Albeit the study could not satisfactorily and authoratively establish causes of this aversion beyond information deficiency and incoordination within banks, it is clear that it (aversion) led to a form of self-censure to obtaining loans. More research is needed to get a better understanding of this phenomenon
