SMEs express growing confidence in government support programmes

Government support programmes for small and medium enterprises appear to be finding resonance with many organisations in their target audience.

May 9, 2014

Government support programmes for small and medium enterprises (SMEs) appear to be finding resonance with many organisations in their target audience. According to SME Survey 2014, more than half of the SMEs polled expressed satisfaction with the quality of these services.

SME Survey has contributed ground-breaking research into the forces shaping SME competitiveness since 2003. It is recognised as the largest representative survey of SMEs in South Africa and the final 2014 survey results are scheduled for release in June.

According to Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey, the satisfaction expressed by SMEs in the government support programmes is welcome news.

“We are seeing the most positive response in a decade to these support programmes. Ten years ago, the proportion of SMEs expressing satisfaction with these programmes was a mere 12%. By 2007, it had increased to 34%, but this still meant that only one third of SMEs were happy with such programmes,” he says.

“The 2014 interim results show that of those respondents who had used government support services, more than half (53%) claimed to be pleased with the overall quality of these services.”

Moreover, adds Goldstuck, sentiment is beginning to improve even amongst those entities that do not use these services. He points out that some 44% of all respondents said that they were confident about the use of government support services to grow their business, while only 39% of respondents had actually used such services.
Asked which government services were deemed to be the most effective in terms of business support, Goldstuck says that he was quite surprised to discover that the SA Revenue Service (SARS) is rated positively by 58% of those who have used these services.

“In addition to SARS, the Small Enterprise Development Agency (Seda) also offered a strong showing in the awareness of SMEs, with exactly a quarter of the SMEs rating it positive.”

According to Lusapho Njenge, Chief Strategy and Information Officer at Seda, the survey results indicate that the agency’s role in assisting SMEs to grow their businesses is becoming more widely known.

“Obviously, our aim is to grow the awareness of our role within the SME sector, and in so doing, also improve on the numbers of such organisations that view us in a positive light. To do this, we need to learn from the areas of dissatisfaction highlighted by SMEs in the survey, in order to continue to improve the services we offer to this sector.”

According to Goldstuck, SMEs expressed strong dissatisfaction with four particular areas of government support programmes.

“Turnaround time was the single biggest bugbear, with 46% complaining about it. Three other issues that cropped up were all cited by fewer than one in five SMEs, but nonetheless should be of interest to the programme providers. Accessibility was an issue for 19%; Communications for 15%; and Feedback for 10%. In combination, all of these suggest that support programmes clearly need to be more responsive to their users.”

Finally, Goldstuck suggests that there have also been some interesting sentiments expressed towards red tape and legal compliance.

“The most positive response was to the Basic Conditions of Employment Act, with 77% of companies approving. This suggests an acknowledgement of the importance of looking after employees. Just behind this was SETA (Sector Education and Training Authorities) and the Skills Development Levy which has long been the most positively received Government incentive, with a 75% approval rating.”

“Bottom of the list, however, is the Registration of Entities, with only 54% of SMEs voicing their approval of this area of legislation. This emphasises the frustration SMEs often have with the most fundamental aspect of starting a business, namely the registration thereof. This, then, is clearly an area where government needs to pay a lot more attention, if it is serious about oiling the wheels of the economy,” he concludes.

SME Survey 2014 is sponsored by the Small Enterprise Development Agency (Seda), Business Connexion and Microsoft.

For more information, visit www.smesurvey.co.za