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Impact assessment of funding on technology acquisition by small businesses: A case study of hair salons in a South African municipality

Nnamdi O. Madichie (Bloomsbury Institute, London, UK)
Nosiphiwe Mpiti (Department of Business Support Studies, Faculty of Management Sciences, Central University of Technology, Bloemfontein, South Africa)
Patient Rambe (Department of Business Support Studies, Faculty of Management Sciences, Central University of Technology, Bloemfontein, South Africa)

Journal of Enterprising Communities: People and Places in the Global Economy

ISSN: 1750-6204

Article publication date: 13 November 2018

Issue publication date: 18 June 2019

785

Abstract

Purpose

This study aims to examine the influence of funding on the technology acquisition by small businesses in a metropolitan municipality, Mangaung, which governs Bloemfontein and surrounding towns in the Free State province of South Africa.

Methodology/design/approach

A case study using survey research strategy of 110 small businesses in a South African municipality informed the research design for this study. The structured questionnaires were quantitatively analysed yielding both descriptive and regression results to address the research objectives.

Findings

The findings suggest that the prime sources of public funding for hair salon businesses are the National Youth Development Agency and the Small Enterprise Development Agency. The results also demonstrate that public funding has a negative and significant impact on technology acquisition, perhaps suggesting the complexity of debt financing and the exorbitant interest rates charged on principals borrowed by foreign nationals.

Originality/value

The study recommends the judicious acquisition of inexpensive technologies (e.g. social media platforms) and cautionary utilisation of complex technologies and personal savings before resorting to external borrowing.

Keywords

Acknowledgements

This is a revised and extended version of a previous paper presented at the Central University of Technology in April 2017.

Mpiti, N. and Rambe, P. (2017). Impact of Public Funding on SMMEs’ Acquisition of Technology: A Hair Salon Business Perspective. Unit for Enterprise Studies, Faculty of Management Sciences, Central University of Technology, Free State Hosted at the Hotel School 5-7 April, (pp. 212-226). Proceedings of the 1st International Conference on Entrepreneurship Development (ICED) 2017. ISBN: 978-0-9946995-0-3. available at: www.cut.ac.za/wp-content/uploads/2016/08/CUT-1st-ICED-Conference-proceeding-17-09.pdf#page=225

Citation

Madichie, N.O., Mpiti, N. and Rambe, P. (2019), "Impact assessment of funding on technology acquisition by small businesses: A case study of hair salons in a South African municipality", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 13 No. 1/2, pp. 145-166. https://doi.org/10.1108/JEC-09-2018-0058

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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