Incubator management experiences engaging with public SMME financiers at national and provincial levels in South Africa

Abstract

BACKGROUND : Public funding agencies are governmental funding organs tasked with supplying developmental finance to prospective and emerging entrepreneurs. These agencies focus on bridging the finance gap between investors and entrepreneurs, overcoming strict collateral and own contribution needs. Given South Africa's standing as a developing country, public funding agencies play a pivotal role in enfranchising and empowering emerging entrepreneurs from impoverished sectors of South African society PURPOSE OF THE STUDY : The study's objective was to document the experiences that incubator managers have with public small, medium and micro-enterprise financiers at a national and provincial level. DESIGN/METHODOLOGY/APPROACH : A qualitative research design was used in this study. Data were collected using semi-structured interviews that were recorded and transcribed. The sample consisted of 17 business incubator managers from separate business incubators all over South Africa. A combination of convenience, homogenous purposive and snowball sampling were employed. RESULTS/FINDINGS : Findings revealed that negative experiences between public funding agencies and business incubators were poor lead times on applications, complicated application processes, strict funding requirements, ineffective financing and ineffective staff. Furthermore, findings revealed that positive experiences between public funding agencies and business incubators were improved credibility and higher chances of funding success when applicants are under the auspices of the business incubator. MANAGERIAL RECOMMENDATIONS : Critical shortcomings in public funding agencies' funding processes were documented, and public funders have been advised to adopt a standardised list of funding requirements, improve communication with incubators and improve staff competencies.