Barriers to Start-Up and Sustainable Growth of Smmes : A Comparative Study between South Africa and Lesotho

Abstract

In the African context, Small, Medium and Micro Enterprises (SMMEs) still face challenges that hinder their start-up and growth. This paper used a quantitative approach to identify commonalities and differences pertaining to impediments to SMMEs start-up and growth in South Africa and Lesotho. The findings reveal that although there are common barriers to SMMEs start-up and growth in both countries, these barriers are more pronounced in South Africa than in Lesotho. The Mann Whitney U test showed that the perception that access to finance, high interest rates and income tax are barriers to start a business is statistically significantly higher in South Africa than in Lesotho. In addition, statistically, high interest rates, income tax and high rental charges are significantly highly perceived as barriers to business growth in South Africa than in Lesotho. Thus, this paper advocates for tailor-made solutions to deal with these impediments.