The relationship between SME financial sustainability and owners’ financial well-being in South Africa
DOI:
https://doi.org/10.20525/ijrbs.v13i5.3464Keywords:
Financial sustainability, financial well-being, SMEs, Quantitative research, Economic stability, Financial literacyAbstract
This study examines the relationship between financial sustainability and the financial well-being of SME owners in Durban, South Africa. Utilising a quantitative research design, data were gathered through close-ended surveys from a diverse cross-section of SME owners, employing a cross-sectional approach.The study adopted a positivist philosophical framework, emphasising quantitative data analysis to derive conclusions. A total of 250 responses were collected, yielding a robust response rate of 82%. The analysis involved descriptive statistics and correlation analysis, with the correlation matrix revealing a positive, statistically significant correlation (r = 0.504, p < 0.05) between financial sustainability and financial well-being. The findings indicate that higher levels of financial sustainability are associated with greater financial well-being among SME owners, though the strength of this relationship is moderate. The regression analysis further supports this positive association, suggesting that interventions aimed at enhancing financial sustainability may significantly improve the financial well-being of SME owners. These results align with the theoretical framework of the Easterlin Paradox, which highlights the relative importance of financial stability in enhancing overall well-being. Based on these findings, several recommendations are proposed, including fostering financial literacy, enhancing access to financial resources, and promoting entrepreneurial collaboration.
Downloads
References
Abisuga-Oyekunle, O. A., & Muchie, M. (2021). Handicraft small enterprises as an instrument for rural economic growth and poverty eradication. Problems and Perspectives in Management, 18(4), 25. DOI: https://doi.org/10.21511/ppm.18(4).2020.03
aliamutu, K. F., & Mkhize, M. (2024). The impact of failure to make payment behaviour on the profitability of South African municipal electricity suppliers. International Journal of Environmental, Sustainability, and Social Science, 5(3), 435-451.
Aliamutu, K. F., & Mkhize, M. V. (2024). The Obstacles of Women Entrepreneurship on Empowerment in Rural Communities KwaZulu Natal, South Africa. Indonesian Journal of Innovation and Applied Sciences (IJIAS), 4(1), 88-96. DOI: https://doi.org/10.47540/ijias.v4i1.1259
Ayalu, G., Abbay, A. G., & Azadi, H. (2023). The role of micro-and small-scale enterprises in enhancing sustainable community livelihood: Tigray, Ethiopia. Environment, Development and Sustainability, 25(8), 7561-7584. DOI: https://doi.org/10.1007/s10668-022-02359-7
Aliamutu, K. F., & Mkhize, M. (2024). The impact of failure to make payment behaviour on the profitability of South African municipal electricity suppliers. International Journal of Environmental, Sustainability, and Social Science, 5(3), 435-451. DOI: https://doi.org/10.38142/ijesss.v5i3.889
Carr, S. C. (2023). Wage and well-being: Toward sustainable livelihood. Springer Nature. DOI: https://doi.org/10.1007/978-3-031-19301-9
Chiloane-Phetla, G. E., & Mathipa, R. E. (2021). An exploration of challenges faced by small-medium entreprises caused by covid-19: The case of South Africa. Academy of Entrepreneurship Journal, 27(1), 1-13.
Easterlin, R. A., & O’Connor, K. J. (2022). The easterlin paradox. In Handbook of labor, human resources and population economics (pp. 1-25). Cham: Springer International Publishing. DOI: https://doi.org/10.1007/978-3-319-57365-6_184-2
Enaifoghe, A., & Ramsuraj, T. (2023). Examining the Function and Contribution of Entrepreneurship through Small and Medium Enterprises as Drivers of Local Economic Growth in South Africa. African Journal of Inter/Multidisciplinary Studies, 5(1), 1-11. DOI: https://doi.org/10.51415/ajims.v5i1.1172
Eze, I. F., & Lose, T. (2023). Consequences Of Failure And Challenges Of Small Business In South Africa: A Theoretical Review. Business Excellence & Management, 13(3). DOI: https://doi.org/10.24818/beman/2023.13.3-02
Farooq, S. H., Shah, S. Z. A., & Rasheed, S. (2021). Impact of Financial Attitude, Financial Literacy and Parental Financial Socialization on Prudent Financial Management Practices: A Moderating Effect of Financial Well-Being among the Youth of Pakistan. Abasyn University Journal of Social Sciences, 14(1). DOI: https://doi.org/10.34091/AJSS.14.1.02
Farrington, S. (2017). Psychological well-being and perceived financial performance: An SME perspective. South African Journal of Business Management, 48(4), 47-56. DOI: https://doi.org/10.4102/sajbm.v48i4.42
Fatoki, O. (2018). The impact of entrepreneurial resilience on the success of small and medium enterprises in South Africa. Sustainability, 10(7), 2527. DOI: https://doi.org/10.3390/su10072527
Jordaan, H. (2020). Access to finance of SMMEs from formal lending institutions in the Free State Goldfields (Doctoral dissertation, University of the Free State).
Khalil, E. L. (2022). Solving the income-happiness paradox. International Review of Economics, 69(3), 433-463. DOI: https://doi.org/10.1007/s12232-022-00398-0
Khuzwayo, M. E. (2023). An assessment of the impact of the fourth industrial revolution on manufacturing small and medium enterprises: a case study of Durban, South Africa (Doctoral dissertation).
Lone, U. M., & Bhat, S. A. (2024). Impact of financial literacy on financial well-being: a mediational role of financial self-efficacy. Journal of Financial Services Marketing, 29(1), 122-137. DOI: https://doi.org/10.1057/s41264-022-00183-8
Maduku, H., & Kaseeram, I. (2021). Success indicators among black owned informal Small Micro and Medium Enterprises’(SMMEs) in South Africa. Development Southern Africa, 38(4), 664-682. DOI: https://doi.org/10.1080/0376835X.2021.1913997
Maziriri, E. T., Chuchu, T., & Madinga, N. W. (2019). Antecedents of psychological well-being among workers within small and medium enterprises. SA Journal of Industrial Psychology, 45(1), 1-13. DOI: https://doi.org/10.4102/sajip.v45i0.1691
Mishi, S., Tshabalala, N., Anakpo, G., & Matekenya, W. (2023). COVID-19 Experiences and Coping Strategies: The Case of Differently Sized Businesses in South Africa. Sustainability, 15(10), 8016. DOI: https://doi.org/10.3390/su15108016
Msomi, T. S., & Nzama, S. (2022). Financial literacy and SME loan repayments in South Africa during the COVID-19 era. Investment Management and Financial Innovations, 19(4), 113-121. DOI: https://doi.org/10.21511/imfi.19(4).2022.09
Msomi, T. S., Odunayo, M. O., & Ngcobo, X. (2021). Sustaining South African small and medium-sized enterprises through monetary access and Literacy in the COVID-19 ERA. Folia Oeconomica Stetinensia, 21(2), 57-75. DOI: https://doi.org/10.2478/foli-2021-0016
Rabonda, N. (2023). Exploring the influence of the Covid-19 pandemic on SMEs in Gauteng, South Africa (Doctoral dissertation, North-West University (South Africa)).
Ratnawati, R., Rahman, M., Rochayatun, S., Meldona, M., & Rahayu, Y. N. (2023). Financial attitude and financial performance of export MSMEs: Financial well-being as a mediating. International Journal of Applied Economics, Finance and Accounting, 16(1), 77-85. DOI: https://doi.org/10.33094/ijaefa.v16i1.901
Yang, X., Geng, L., & Zhou, K. (2020). Environmental pollution, income growth, and subjective well-being: regional and individual evidence from China. Environmental Science and Pollution Research, 27, 34211-34222. DOI: https://doi.org/10.1007/s11356-020-09678-0
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Thabiso Msomi, Kansilembo Aliamutu
This work is licensed under a Creative Commons Attribution 4.0 International License.
For all articles published in IJRBS, copyright is retained by the authors. Articles are licensed under an open access Creative Commons CC BY 4.0 license, meaning that anyone may download and read the paper for free. In addition, the article may be reused and quoted provided that the original published version is cited. These conditions allow for maximum use and exposure of the work, while ensuring that the authors receive proper credit.
