The influence of private equity on SMME access to non-financial support in South Africa

Abstract

Small, medium, and micro enterprises (SMMEs) are crital to South Africas economy, yet they face significant challenges in accessing the necessary resources for sustainable growth. Private equity (PE) is generally associated with financial investment, but its role in providing non-financial support has received limited academic attention, particularly in emerging markets like South Africa. This study explores the influence of private equitydriven non-financial support on SMME sustainability and scalability, assessing the alignment between PE interventions and the actual needs of SMME owners. The study employs a qualitative research methodology, it uses semi-structured interviews and the participants are SMME owners and PE providers in Gauteng province, South Africa. The study adopted an interpretivist approach, utilising thematic analysis to explore key areas such as strategic guidance, mentorship, governance, and networking opportunities. The study findings reveal that, while PE firms provide valuable non-financial support, challenges such as strategic misalignment, resistance from entrepreneurs, and inconsistencies in delivery hinder its full impact. This research contributes to the discourse on PE in emerging markets, offering insights into how PE firms can enhance their support mechanisms to foster long-term SMME sustainability. Recommendations include a more structured approach to the delivery of nonfinancial support and greater collaboration between PE firms and SMMEs.