Abstract:
Despite the South African government’s strategic policy interventions and huge investments into small business
development over the past two decades, solid evidence of the transition of informal businesses to the formal sector is
hard to encounter. Furthermore, the high rates of unemployment in the country point to the growing incapacity of smallscale,
micro and medium enterprises (SMMEs) to address the chronic social ills of poverty, inequality and social
deprivation ravaging the country. Building on mainstream literature on the government interventions designed to
promote growth without equity among SMMEs and Sen’s capabilities approach, this theoretical study advances a
poverty-reduction approach to entrepreneurship underpinned by a systematic integration of multiple-level conversion
factors, sustainable resourcing (especially seed funding and managerial capacity development), commercialization of
business activities, a strong entrepreneurial orientation and solid managerial capabilities. Such an integrated approach
was deemed to strengthen the capacity of SMMEs to survive the competition from established commercialised enterprises.
