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Risk management of SMMEs
Author(s)
Boubala, Helene Gesika Oumbahouin
Date Issued
2010
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
Developing countries face the great challenge of balancing growth with equity and
justice. Growth, in all its fairness, should translate into equitable opportunity for all,
but as is observed, the distributional effect of growth often does not filter down to the
majority of the socially and economically disadvantaged communities. It is imperative
in these situations to embark on a process of developmental change to improve the
quality of life of the majority of the disadvantaged community.
South Africa used this strategy to endeavour to encounter or reverse the political
history of the country, by encouraging entrepreneurs of previously disadvantaged
racial groups through the Department of Trade and Industry (DTI) to open small
businesses. The South African Government believes that the development, growth and
sustainability of the Small, Medium and Micro Enterprise (SMME) sector will help
the country to decrease the high unemployment rate, and lead the country as a whole
to a sustainable economical development. Research has shown that this aim can no
longer be achieved by only facilitating access to finance to entrepreneurs. They argue
that some management strategies such as risk management should be introduced,
understood and applied by small business owners, in order for their businesses to go
beyond their actual estimated survival period referred as 3 to 5 years maximum.
This research provides background to which risk management techniques are applied
within the ambit of small enterprises. The data were collected from eighty eight
companies drawn from a possible of 150 small enterprises found in the Cape
Metropole. The analysis of data of those who responded has shown that very few
SMME owners, managers, entrepreneurs or key designated employees make use of
risk management tools and techniques within their businesses, to achieve growth and
sustainability. However, the majority agreed to the high importance of risk
management in the success of a business enterprise.
justice. Growth, in all its fairness, should translate into equitable opportunity for all,
but as is observed, the distributional effect of growth often does not filter down to the
majority of the socially and economically disadvantaged communities. It is imperative
in these situations to embark on a process of developmental change to improve the
quality of life of the majority of the disadvantaged community.
South Africa used this strategy to endeavour to encounter or reverse the political
history of the country, by encouraging entrepreneurs of previously disadvantaged
racial groups through the Department of Trade and Industry (DTI) to open small
businesses. The South African Government believes that the development, growth and
sustainability of the Small, Medium and Micro Enterprise (SMME) sector will help
the country to decrease the high unemployment rate, and lead the country as a whole
to a sustainable economical development. Research has shown that this aim can no
longer be achieved by only facilitating access to finance to entrepreneurs. They argue
that some management strategies such as risk management should be introduced,
understood and applied by small business owners, in order for their businesses to go
beyond their actual estimated survival period referred as 3 to 5 years maximum.
This research provides background to which risk management techniques are applied
within the ambit of small enterprises. The data were collected from eighty eight
companies drawn from a possible of 150 small enterprises found in the Cape
Metropole. The analysis of data of those who responded has shown that very few
SMME owners, managers, entrepreneurs or key designated employees make use of
risk management tools and techniques within their businesses, to achieve growth and
sustainability. However, the majority agreed to the high importance of risk
management in the success of a business enterprise.
Additional information
Thesis (MTech (Internal Auditing))--Cape Peninsula University of Technology, 2010
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