Increased confidence in govt support for SMEs

2 June 2014

South African government support programmes for small and medium enterprises (SMEs) are receiving better approval ratings from their users, according to a new survey by technology market researchers World Wide Worx.

According to the interim results of World Wide Worx’s SME Survey 2014, released last month, more than half (53%) of small businesses polled for the survey expressed satisfaction with the overall quality of the government’s SME support services.

“We are seeing the most positive response in a decade to these support programmes,” World Wide Worx MD Arthur Goldstuck said in a statement. “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.”

Goldstuck said sentiment was beginning to improve even among businesses that did not use government services: some 44% of all respondents said they were confident about the use of government support services to grow their business, despite only 39% of respondents having actually used these services.

Thumbs-up for Sars, Seda

When respondents were asked which support services were thought to be the most effective, the South African Revenue Service (Sars) was given the thumbs-up by 58% of SMEs who used their 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,” Goldstuck said.

According to Seda’s chief strategy and information officer, Lusapho Njenge, the survey results indicate that the agency’s role in helping SMEs 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,” Njenge said. “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.”

Areas of dissatisfaction

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.”

Goldstuck added that the survey highlighted “some interesting sentiments” regarding 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,” Goldstuck noted.

“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.”

SAinfo reporter