Evaluating the Performance of Micro-Finance Institutions (MFIs)

It has been stated that small business development is key to growing the South African economy through job creation and providing essential goods and services that large corporations would normally regard as not being core to their business. According to Mahembe (2011:14) the economic contributions include economic growth, maintaining a favourable balance of payments and balance of trade and employment creation. Socially, entrepreneurship results in poverty eradication and improved standards of living. SMMEs are, therefore, an essential panacea for improving the standards of living in a society and the stability of a country (Mahembe, 2011:15). The National Small Business Act of 1996 defines a small business a separate and distinct business entity, including cooperative enterprises and non-governmental organisations, managed by one owner or more which, including its branches or subsidiaries, if any, is predominantly carried on in any sector or subsector of the economy, which can be classified as a micro-, a very small, a small or a medium enterprise.