The relationship between SME financial sustainability and owners’ financial well-being in South Africa

Abstract

This study examines the relationship between financial sustainability and the financial well-being of SME owners in Durban, South Africa. Utilising a quantitative research design, data were gathered through close-ended surveys from a diverse cross-section of SME owners, employing a cross-sectional approach.The study adopted a positivist philosophical framework, emphasising quantitative data analysis to derive conclusions. A total of 250 responses were collected, yielding a robust response rate of 82%. The analysis involved descriptive statistics and correlation analysis, with the correlation matrix revealing a positive, statistically significant correlation (r = 0.504, p < 0.05) between financial sustainability and financial well-being. The findings indicate that higher levels of financial sustainability are associated with greater financial well-being among SME owners, though the strength of this relationship is moderate. The regression analysis further supports this positive association, suggesting that interventions aimed at enhancing financial sustainability may significantly improve the financial well-being of SME owners. These results align with the theoretical framework of the Easterlin Paradox, which highlights the relative importance of financial stability in enhancing overall well-being. Based on these findings, several recommendations are proposed, including fostering financial literacy, enhancing access to financial resources, and promoting entrepreneurial collaboration.