Petronella Jonck
Abstract
Small and medium size entities (SMEs) play a pivotal role in the economy contributing to gross domestic product, reducing unemployment and stimulating entrepreneurial activities. Especially informal sector SMEs since it is assumed that the informal sector absorbs surplus employees from the formal sector. The purpose of the research was to investigate the impact of infrastructure considering electricity, water supply and sanitation facilities on the organisational performance of informal sector SMEs. The rationale for the study is premised on the supposition that the external business environment subsuming infrastructure is a functional prerequisite to encourage entrepreneurship and stimulate economic growth.
A quantitative research methodology based on secondary data obtained from Statistics South Africa was implemented. Statistical analyses were performed on a sample comprising of 1658 participants. The statistical model was tested using a pluralistic approach consisting of correlation analysis, structural equation modelling and multiple regression analysis. Results indicated that water and sanitation facilities statistically significantly affected annual turnover and debt negatively. Electricity or power supply did not yield a statistically significant result, however 68.4% of the sample indicated access to power supply. A forestated could be used in future as a comparison point to determine the impact of loadshedding on SME performance.