Abstract:
Small, Medium, and Micro Enterprises (SMMEs) form the backbone of South Africa’s
economy, accounting for over 98 percent of businesses, contributing approximately 39 percent
to the national GDP, and employing more than 60 percent of the workforce. However, the
COVID-19 pandemic severely disrupted economic activity, with particularly adverse effects on
SMMEs within the Makhado Local Municipality. This study investigates the impact of COVID-
19 on SMMEs in Makhado Local Municipality, examining financial, operational, and strategic
challenges. The study is grounded in the Resource-Based View (RBV) and resilience theory,
contributing to academic debates on small business survival and crisis response. The findings
offer both practical insights for policy makers and business owners, and theoretical
implications for understanding how resources and capabilities shape resilience in times of
crisis. A quantitative research design was employed, utilizing self-administered questionnaires
distributed to SMME owners and managers. Stratified sampling ensured diverse
representation across various SMME sectors, resulting in a response rate of 97 percent. Data
were analysed using descriptive statistics, cross-tabulations, Fisher’s Exact Test, and logistic
regression. The findings indicate significant revenue losses, acute cash flow challenges, and
operational interruptions, often resulting in staff retrenchments and business closures.
Notably, increased debt burdens and liquidity shortfalls emerged as critical threats to longterm
sustainability. The study also highlights the role of government intervention in mitigating
these challenges. Although various relief measures were introduced, many SMMEs faced
difficulties accessing support due to complex application procedures and restrictive eligibility
criteria. These shortcomings underscore the urgent need for more accessible, targeted policy
responses. The study concludes by advocating for streamlined funding mechanisms,
improved access to markets, and enhanced digital infrastructure to bolster SMME resilience.
These recommendations contribute meaningfully to policy discussions on economic recovery
and crisis management, offering practical insights for strengthening the sustainability and
preparedness of the SMME sector in the face of future economic disruptions.
