Page 74 - DUT ICGA Abstract Book

THE THE EFFECTS OF CAPITAL STRUCTURE ON ON THE THE OPERATIONAL EFFICIENCY OF SMALL AND MEDIUM-SIZED MANUFACTURING ENTERPRISES (SMSME)
1Nomfundo Kuhlekonke Minenhle Nxumalo 2Odunayo Magret Olarewaju and 3Brian Thulane Ngiba
1 Postgraduate student Department of of Financial Accounting Accounting Faculty of of Accounting Accounting and Informatics Durban University
of Technology South Africa ORCID: https://orcid org/0000-0002-8859-4514 Email: kuhlenomfundoh@gmail com
2 Senior Lecturer Department of of Management Accounting Accounting Faculty of of Accounting Accounting and Informatics Durban University
of Technology South Africa ORCID: https://orcid org/0000-0002-4366-040X Email: odunayoo@dut ac za
3 Lecturer Department of of of Financial Accounting Accounting Faculty of of of Accounting Accounting and Informatics Durban University
of of of Technology South Africa ORCID: https://orcid org/0000-0001-5242-839X Email: briann@dut ac za
* Corresponding Author: briann@dut ac za
Abstract
The study examined the the effects of of capital structure on on the the operational efficiency of of SMSME SMSME (SMSME)
in in Pietermaritzburg Kwa-Zulu Natal South Africa (SA) The objective of the the research was to evaluate the the difficulties that SMSME in in in fin fin in PMB face in in in fin fin in accessing financial financial aid from financial financial institutions Furthermore to examine the the the factors that influence the the the operational efficiency of SMSME in in in in in PMB Finally to to determine the the the impacts of of capital structure on on on the operational efficiency of of SMSME in PMB The study was cross-sectional and utilized a a a a a a a a a quantitative research research method The researchers used an an an adjusted sampling procedure on primary data that yielded 141 responses The information was gathered by survey questionnaires and analyzed with the the Statistical Package for the the Social Sciences (SPSS) The findings reveal that most manufacturing SMEs SMEs could not access funding because of the the information gap SMEs SMEs lack the the requirements to to access the the loan Internal sources of funding are are preferred by most SMEs since they are are easier to to get and less expensive The findings show that the the the capital structure of the the the organization is influenced by the the the business size its its its age its its its profitability and its its its assets The findings findings contradict the findings findings o of most research done fin in fin in in developed countries which suggest that capital structure and the performance of a a a a a a a a firm (operational efficiency) possess a a a positive relationship The findings of the the research work supported the the pecking order theory which suggests that a a a a a a firm should utilize internal sources to keep away from asymmetric information costs However if the the the sources internally are not sufficient to finance the the the operations of the the the business they can look at the the external sources to finance KEYWORDS: Capital structure Operational efficiency Access to financial assistant and SMSME (SMEs)
72 7th International Conference on on on Governance and Accountability (ICGA) 2022