Small, Medium and Micro Enterprises (SMMEs) have been identified as a key component to
advancing inclusive growth and development in South Africa. This paper serves to present a
snapshot of the current profile of SMMEs in South Africa as well as the key inhibitors of growth
for SMMEs. We provide a comparative perspective of the role of SMMEs and entrepreneurship
in South Africa, then profile the current landscape of SMMEs in South Africa, evaluating the
characteristics of SMMEs across three dimensions: firm, owner and employee characteristics.
Following this, we distinguish between formal and informal SMMEs in order to highlight the
unique nature of informality in South Africa. This paper also evaluates the endogenous and
exogenous impediments to growth faced by South African SMMEs. Endogenous challenges
are internal to the firm while exogenous challenges are external to the firm. In summarising
these findings, we present the major challenges inhibiting the growth of SMMEs in South
Africa, taking into account firm heterogeneity in terms of both firm size and informality status.
