Explore publications.

This study examines the most significant challenges facing Small and Medium Enterprises (SMEs) in South Africa, drawing on firm-level data from the 2022 World Bank Enterprise Survey. Using probit regression analysis, it explores how firm size, sector, geographic location, and female ownership influence the severity of perceived business constraints—namely, access to finance, infrastructure, regulation, workforce skills, crime, and the informal sector. The results indicate that sectoral differences are the strongest predictors of obstacle severity. Due to their capital and logistics needs, sectors such as Fabricated Metal Products, Construction, and Retail face heightened financial and transport challenges. Regionally, firms outside Gauteng, KwaZulu-Natal, and the Western Cape report more severe infrastructure issues, particularly electricity, while those within these provinces face greater skills shortages. Medium-sized firms generally report fewer constraints than smaller firms. Female ownership is not a consistent determinant of obstacle severity; however, firms without female ownership perceive corruption and crime as slightly less severe. These findings underscore the need for targeted, sector- and region-specific policy responses, particularly in enhancing financial access for capital-intensive industries and addressing regional disparities in infrastructure and workforce development.

Small to Medium Enterprises (SMEs) are a key part of socio-economic development in South Africa by providing employment, generating incomes, and alleviating poverty. Despite their significance, South African SMEs continue to register high failure rates, low growth rates, and short lifespan, particularly in unstable industries. Existing research has consistently cantered on the determinants of firm performance but has been remiss in considering the combined effect of firm size, financial turnover, and performance on lifespan in SMEs—specifically in diversified industrial settings. Bridging the research gap in extant research, the present research considered the interrelationship between the aforementioned variables in the best-performing and poorest-performing industries in South Africa, Manufacturing and Construction industries. The study used a correlational research design and collected data from 204 SMEs using structured questionnaires to gauge the number of employees, turnover per year, and operation period in years. Pearson correlation analysis established that in the Manufacturing industry, longevity was weakly and significantly interrelated with turnover and size but in the Construction industry was weak or statistically non-significant. Contrastingingly, when both industries were combined together, weak but statistically significant interrelationship was established between longevity and both turnover and size, but a strongly positive interrelationship was established between turnover and size. The results conclude that firm size and financial performance are key drivers of the lifespan of SMEs, especially in more stable industries.