Factors that influence the success and failure of land bank supported farming small, micro and medium enterprises (SMMES) in South Africa


V. M. Mmbengwa1* T. Ramukumba¹, J. A. Groenewald2, H. D. van Schalkwyk2, M.B. Gundidza3and A. N. Maiwashe4

In order to establish reasons for their success and failure (defining failure as incapability to meet financial obligations, e.g. defaults), a study was undertaken to determine the problems faced by emerging or developing farmers, who are clients of, or are /funded by the Land Bank. Results from this study revealed that the farmers’ perceptions do depict a lack of capacity on essential prerequisites for their businesses, especially, their perception on the value of extension support and business plans. The objective analysis of farm profitability shows that emerging farmers are unable to accurately identify factors that influence their success and failure. Extension support, sole proprietorship and business plans were found to be crucial for the farming supported farming small, micro and medium enterprises (SMMEs) to succeed and be profitable. It is therefore essential that agricultural stakeholders ensure that farming SMMEs have adequate support regarding the identified factors that may potentially influence profit and loan repayments, as these factors are crucial for the success of these enterprises.

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