Faculty of Accounting and Informatics
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Item The impact of financial statement quality and firm characteristics on access to finance by small and medium-sized enterprises in eThekwini(2024) Mayendisa, Qiniso Prince; Stainbank, Lesley June; Ramsarghey, AnchalThe South African government has established several public sector institutions that cater to small and medium-sized entities’ (SMEs) needs through the Department of Trade, Industries and Competition. These institutions, known as Business Development Service Providers, assist SMEs in running their businesses more effectively and can enhance access to finance as an alternative form of collateral in circumstances where security for a loan is required. However, most SMEs apply for finance from financial institutions. As access to finance has been identified as a major obstacle limiting the growth and survival of SMEs, the objective of this research was to investigate the impact of financial statement quality and firm characteristics on access to finance by SMEs in eThekwini using the “Applied and Received” approach. The main research objective was divided into three sub-objectives; these were to determine the forms of finance being used by SMEs, to determine the accounting frameworks being used by SMEs, and to investigate whether financial statement quality and firm characteristics affect their access to finance. To achieve these objectives, a questionnaire was administered to owners of SMEs in eThekwini. The results revealed that the main forms of finance used by the SMEs were overdraft facilities, bank loans, factoring, leasing, and hire purchase, and that the average rate of extent of access to finance is 19.10%. The findings also revealed that 4.8% of the respondents were using IFRS, 72.9% were using IFRS for SMEs, and 22.3% were using South African Statements of Generally Accepted Accounting Practice. Lastly, the findings revealed that firm age, firm size, collateral, and financial statement quality have a significant effect on access to finance by SMEs. Therefore, possession of such firm characteristics and financial statement quality are important predictors of SMEs’ successful access to finance. The Government needs to help SMEs by providing them with educational programs that will assist them in compiling and understanding their financial statements to keep them improving and surviving. Furthermore, an SME’s growth and survival also depends on its access to finance.Item Exploring quality administration management practices on customer retention and satisfaction : case study of small medium micro enterprises at eThekwini Metropolitan area(2024) Mchunu, Nkosingiphile Trevor; Ngxongo, Nduduzo Andrias; Moyane, Smangele PrettySmall Medium Micro Enterprises (SMMEs) play a significant role in many countries’ economic growth and development. However, customer retention and satisfaction remain critical challenges facing SMMEs. This study investigated the effectiveness of quality administration management practices in SMMEs located in the eThekwini Metropolitan Area. The objectives of the study were to examine how quality administration management practices impact customer retention and satisfaction in SMMEs located in the eThekwini Metropolitan area, to comprehend the influence of training and development of employees on quality management practices and customer retention and satisfaction in small and medium-sized enterprises (SMMEs), to recognise how internal and external factors impact quality management practices in SMMEs in the eThekwini Metropolitan area and, to determine the factors that contribute to and hinder customer retention and satisfaction in SMMEs in the eThekwini Metropolitan area and propose integrated, effective quality administration management practices to address these factors. The Quality Administration Management Theory (QAMT) was adopted as a theoretical framework in this study to assert the effective role of administration and management in achieving successful business quality management practices in SMMEs. QAMT’s focus was relevant to small and medium-sized enterprises (SMEs), which often face resource constraints and struggle to implement quality management practices effectively. Due to time constraints, the geographical scope of the study was limited to the eThekwini Metropolitan Area. Potential limitations included the possibility of response bias and a relatively small sample size. The research adopted a quantitative research approach and employed a survey questionnaire to collect data from customers of selected SMMEs. Data was analysed using descriptive statistics and inferential statistics, including t-tests, ANOVA, factor analysis, and regression analysis, through the Statistical Package for the Social Sciences (SPSS) software. The findings of the study indicated that hat continuous improvement with the quality administration management practice significantly influences the customer satisfaction and in return, it positively relates to customer retention. Secondly, the results revealed that the education levels significantly had increasing impact on customer retention perceptions. The study thereafter recommended for SMMEs in the eThekwini Metropolitan area to continue striving for improvement in quality management practices achievable by implementing strategies that cater for customers with different levels of education. Policy frameworks also need to be initiated to develop and promote customer customer retention.Item An exploration of the differing administrative skills and trading practices of local and foreign micro businesses operating in the informal sector within eThekwini Municipality(2022-09-13) Ntombela, Mnotho Slam; Skinner, Jane Phyllida; Ngibe, MusawenkosiThe informal sector in South Africa plays a significant role in alleviating current high levels of unemployment and it has become an economic alternative not only in eThekwini but in the whole of South Africa. The motivation for the study was thus to understand the informal trading practices employed by local and foreign informal traders and something of their impact on the community life and economy of eThekwini, focusing specifically on the administrative practices of different groups of traders, local and foreign. In reaching this aim a set of related issues were investigated in order to be in a position of fully understanding the current situation. This enabled the making of informed recommendations concerning the administrative, economic and educational support structures that could enabled better trading practices. There was a need to understand the requirements of informal traders, the nature of their business practices, and the regulatory context of this sector. The research involved a case study using a mixed methods approach. Questionnaires and follow-up interviews with both local and foreign traders and with their customers were used as the data collection instruments. The study explored the administrative skills and practices of both foreign and local informal traders trading in eThekwini; the experiences of foreigners as regards their reception by local traders; and the perceptions of end consumers concerning the goods and services offered by both groups. The administrative strengths and weaknesses in this business sector were identified. The findings indicated that there is a potential for the informal business sector to become a major role player in sustaining the livelihoods of many people – however, there are constraints that prevent informal businesses from prospering. These include: administrative weaknesses amongst the traders themselves, and local policies and bylaws which fail to provide sufficient support for trading, along with continued harassment by law enforcement officials, bribery demands, and confiscation of traders’ goods. The findings reveal that the location of any business is very important for maximizing the number of customers available and that re-locations by the authorities are often damaging in this respect. Despite some good experiences, the findings showed overall that traders do not have adequate shelters to prevent their goods from getting damaged, nor adequate security. The perceived greater success of foreigners was found to be a point of division and tension between the two groups. Differences in their business practices appeared to be a central issue at the heart of the divisions and therefore a factor in the persistence of xenophobia in the country. The findings indicated that foreign traders’ administrative practices are learned informally but that, as indicated in the literature, they are generally more effective than those of local traders. Unlike local traders, foreigners collaborate with each other, for instance buying in bulk from a specific foreign wholesaler, and uplifting each other by lending capital to start other businesses, trusting that the loans will be repaid once the new businesses prosper. The study also shows that informal trading has created a number of employment opportunities for local South Africans as well as foreigners, and that foreign traders provide services which are appreciated by their customers. It also reveals that most traders, both foreign and local, do not use formal accounting systems and that the business training currently offered by the municipality is not ideal. Foreign traders tend to learn from practical experience but often seek formal certification in South Africa that can allow them to operate freely within the law. The study therefore recommends that institutions of higher learning, local business owners, and the private sector partner with informal traders to provide intensive relevant training, directly designed for groups offering common services. Local traders should also be prepared to consider foreign practices where these have proved successful. The study also recommends that all stakeholders need to be part of committees drafting /amending Municipal traders’ bylaws, thus including informal traders themselves. A committee that includes informal traders, municipal officials, legal experts, ordinary citizens, and university representatives could be formed to deal decisively with the issues, policies or bylaws affecting both local and foreign informal traders.Item Nexus of loan re-payment plans, interest on loans and the sustainability of small and medium enterprises in South Africa(Durban University of Technology, 2022) Msomi, Thabiso Sthembiso; Olarewaju, Odunayo MagretThis paper examined the influences of interest on loans and loan re-payment plans on the sustainability of small and medium enterprises (SMEs) in South Africa. A quantitative research design that adheres to the positivist paradigm was utilized for this study's methodology. The study targeted 103 SMEs operating in KwaZulu-Natal, South Africa using purposive sampling. A total of 103 surveys were administered, representing a participation rate of 100 percent. The analysis demonstrated a positive relationship between interest on loans and the SMEs’ sustainability and positive relationship between Loan re-payment plans and SMEs’ sustainability. The study recommended that financial institutions should examine loan re-payment plans for SMEs as necessary in order to minimize loan defaults by SMEs, and financial institutions should cut loan interest rates and the costs associated with loan approvals, which may be accomplished via automation and the utilization of online applications. Furthermore, the study suggested that financial institutions should design a flexible loan re-payment plan for SMEs that considers the nation's economic realities.Item Evaluation of access to finance, market and viability of small and medium-sized enterprises in South Africa(LLC CPC Business Perspectives, 2021-03-15) Msomi, Thabiso Sthembiso; Olarewaju, Odunayo MagretAccess to finance and market has been described as a predominant challenge confronting small and medium-sized enterprises (SMEs). Hence, this paper seeks to evaluate access to finance, market access and viability of SMEs. A quantitative research method and a purposive sampling technique were used to select the participants for this study. Respondents from retail, manufacturing, construction and agricultural SMEs operating in Durban, KwaZulu-Natal, were selected to complete the structured questionnaires. 310 questionnaires were returned out of 321 distributed. The study revealed a significant effect of access to finance (absolute value 0.425) and access to market (absolute vale 0.373) on SMEs’ viability with a 5% level of significance. Thus, it was concluded that access to finance uniquely accounted for the larger proportion of the variance in the regression model. Thus, this study suggests that owners of SMEs should pay greater attention to access to finance in running their businesses, and the Government should aid SMEs to market their products and keep their businesses viable. Public loans or the government supported loans should be made available for SMEs with soften requirements in order to stimulate economic growth.