Proceedings of The 3rd International Conference on Future of Business, Management and Economics
Investigating the Finance Needs of Small Manufacturing Businesses in the eThekwini Metropolitan Area in South Africa
Prof Muhammad Hoque, Tembakazi Koali
The manufacturing sector is one of the drivers of economic empowerment, job creation and poverty alleviation through its stimulation of growth. Small Medium and Micro Enterprises (SMMEs) in this sector are facing many challenges, including access to markets, the inability to export their products, access to finance as well as basic cyclical cash flow management. Therefore, the objective of this study was to investigate the needs of the small manufacturers operating within the eThekwini Metropolitan area. This was a cross-sectional quantitative study conducted among 57 SMMEs. The study revealed that the lack of access to finance was a hindrance to the growth of these small businesses. Most of the financial assistance that manufacturing business owners used to start up their businesses was sourced from family and friends. Despite the challenges experienced by these business owners, the study revealed opportunities for creative or specialised funding mechanism such as cash flow cycle management, opening of credit lines and invoice discounting. These schemes will go a long way in assisting small manufacturers in staying liquid and being able to produce and deliver on time.
Keywords: Economic empowerment, job creation, poverty alleviation, growth, South Africa.