A great deal of taxpayers’ money has gone to a lot of SMME development initiatives. Despite this effort over the past 17 years, South Africa (SA) lags behind other developing countries, in promoting the growth and sustainability of SMMEs. The impact and achievements of government initiatives have fallen disappointingly short of aspiration (Business Development in South Africa. 2009. Occasional paper). Aims and Objectives: •To evaluate and reflect on the OR Tambo District Municipality SMME funding model and establish whether it has made the desired impact. •Determine if funds that have been channelled by the SA government to SMMEs for business expansion, start-ups, grants, and special industry development have yielded quantifiable results and •Assess the private funding institutions in assisting destitute entrepreneurs in the OR Tambo District municipality. Research methodology: The study was conducted using qualitative research and a questionnaire was used as a data collection tool. The researcher was able to get valuable information on stakeholders in the SMME sector. The stakeholders (SMMEs and funders), formed the core research sample. Results: findings suggest that the OR Tambo Municipality has a funding gap and the current funding model both from public and private funders is not effective in developing SMMEs in the municipality. The overwhelming majority of SMMEs agreed that there is a funding gap between funders and enterprises that seek funding in the ORTDM. “Financing gap” terminology, Underhill Corporate Solutions (UCS) (2011:52) defines it as, ‘a sizeable share of economically significant SMEs cannot obtain financing from banks, capital markets or other finance suppliers.’ About 90 percent of the interviewed SMMEs agreed that there is huge funding gap and 10 percent disputed this and said that there is no funding gap; rather, it’s a funding mismatch between the funders and SMMEs which needs to be tackled by all SMMEs stakeholders. The funding model needs to be revamped so it can also be accessible to start-ups, the unemployed, people with less business management experience and limited skills, and to all sectors of the economy. Various recommendations and suggestions for further research are made based on the research findings. Conclusion: The study has shown that the current SMME funding model is not effective and does not assist in developing SMMEs in ORTDM. The research findings depict the funding plight of SMMEs in South Africa; the SMME plight in ORTDM is more real than imaginary. 70 percent of SMMEs expressed less confidence in government SMMEs agencies in terms of assistance. The bigger portion of SMMEs felt that the funds channelled to government agencies were not providing significant assistance in developing SMMEs in ORTDM. Recommendations: The conclusive response from the sample, reflect structural challenges in the current funding model. About 70 percent of funding institution`s officials said “yes”, the low yield on SMME growth is a matter of funding. The funds which were meant to fund SMMEs for one reason or the other do not reach SMMEs which are looking for funding. Hence the funds channelled in the sector in the last 17 years have not yielded the desired results. 40 percent interviewed government officials conceded that there is serious political meddling in funding SMMEs in the whole province and ORTDM could not be an exception to this rule. 80 percent of interviewed SMMEs in ORTDM said funding was their main problem, and the other 20 percent indicated that their problem was not a matter of funding. The public and the private sector must revise the current funding model or devise another funding model that will: •bridge the existing current funding gap, •distribute the SMME allocated budget and achieve maximum efficiency in budget allocation.

Small and medium enterprises (SMEs) are very important to employment creation, poverty alleviation and the sustainable economic development of a nation. Encouraging SMEs, especially start-ups is crucial for sustainable economic growth. However, the failure rate of start-up SMEs in South Africa is one of the highest in the world. In reviewing the literature of the causes of the failure of start-up SMEs, access to finance emerged as a prime challenge. Start-up SMEs find it very difficult to obtain external finance from commercial banks and venture capitalists. The national and provincial governments in South Africa have realised that access to finance is a major constraint to the growth and survival of start-up SMEs and have put in place certain measures to improve access to finance by start-up SMEs. One of the primary measures put in place by government to improve access to finance by start-up SMEs is the provision of Business Development Service by some government agencies. This research investigates the role of Business Development Services Providers (BDSs) in improving access to finance for start-up SMEs. Questions arise as to why the failure rate of start-up SMEs is high in South Africa despite all these government measures aimed at assisting start-ups to access finance. Empirical research was conducted to investigate the role of BDS in improving access to finance by start-up SMEs. The instrument used for data collection was the self-administered questionnaire. The statistical analyses included descriptive statistics, T-test, ANOVA, correlation and regression analysis. The Cronbach‟s alpha was used as a measure of reliability. The results of the study revealed that: Access to finance is still a major problem hindering the survival of start-up SMEs. There is a lack of awareness of BDS providers and their services by the majority of start-up SMEs. There is a significant positive relationship between the use of BDS by start-up SMEs and success in accessing finance. Start-up SMEs that are aware of BDS do make use of the services. The results suggest that BDS are important to improving access to finance by start-up SMEs. However, there is a need to build awareness and encourage the use of BDS by start-up SMEs to improve their access to finance and ultimately increase their chances of survival.

The thesis investigates the link between internal and external funds in financing new investment when asymmetric information is important. In both chapter, the entrepreneur has private information about the value of a project and, if the quality of the project is high, she tries to signal this to outside investors. The first chapter explores the tradeoff between using internal funds and raising external funds by issuing shares or bonds to finance a project. The entrepreneur can delay the project to accumulate internal funds over time from existing operations. This allows an entrepreneur with a high quality project to reduce her reliance on expensive underpriced bond or share issues. However, accumulating funds is also costly because of discounting and the risk that the project disappears. The more valuable the good project, the less the entrepreneur will delay the project, risking its loss, and so the more she relies on external financing. When external financing is sought, the entrepreneur decides to issue bonds or shares. The greater the value of the good project, the more underpriced shares are relative to bonds. Thus an entrepreneur with a highly valuable good project chooses equity and one with a less valuable project chooses debt. Combining the two results shows that for a highly valuable good project, debt is used, and for a less valuable project, internal funds are used. External equity gets squeezed out. Aggregate data for the U.S. confirm that corporate bond issues are a more important source of funds than new share issued. Furthermore, most small firms rely on internal funds and debt, rather than external equity to finance their projects. The second chapter provides a new theory for the underpricing of initial public offerings (IPOs). As in the first chapter, underpricing is used as a signal of quality. However, the entrepreneur is risk averse and only underprices when she cannot sell enough primary (new) shares to raise sufficient proceeds from the IPO to cover the cost of the project without diluting her position below that needed to signal a high project value. Underpricing allows the entrepreneur to maintain a high stake in the firm and still make a credible signal of quality. This allows more primary shares to be sold resulting in a net increase in proceeds. The model predicts that underpricing should be greatest among firms that don't sell secondary shares (shares held by insiders) at the IPO and that there should be a positive relationship between the firm's capital requirement and the initial return among this group of firms only. A switching regression framework is used. The probit model is first estimated where the probability of no secondary shares is explained by proxies for a firm's capital requirements. The initial return is then regressed on the same proxies, conditioning on whether the firm sells secondary shares or not and accounting for possible correlation between errors in the selection and regression equations. Strong support is found for the positive relationship between initial return and capital requirements for only firms without secondary share sales, as predicted. / Arts, Faculty of / Vancouver School of Economics / Graduate

Firms can use financial derivatives to hedge risks and thereby decrease the probability of bankruptcy and increase total expected tax shields. Firms also can adjust their operational policies in response to fluctuations in prices, a strategy that is often referred to as "operational hedging". In this paper, I investigate the relationship between the optimal financial and operational hedging strategies for a firm, which are endogenously determined together with its capital structure. This allows me to examine how operational hedging affects debt capacity and total expected tax shields and to make quantitative predictions about the relationship between debt issues and hedging policies. I also model the effects of asymmetric information about firms' investment opportunities on their financing and hedging decisions. First, I examine the case in which both debt and hedging contracts are observable. Then, I study the case in which firms' hedging activities are not completely transparent. The models are tested using a data set compiled from the annual reports of North American gold mining companies. Supporting evidence is found for the key predictions of the model under asymmetric information. / Business, Sauder School of / Graduate

Research Thesis being in partial submission for the degree of Master of Management in Finance and Investments at the University of Witwatersrand. / Unlocking the potential for growth at African Development Finance Institutions has become imperative, with the financial crisis of 2007/2009 having generated new discussions on the role of the state in the economy, most especially in the financial sphere (Calice, 2013). This raises new interests among decisionmakers involved in development finance institutions (DFIs), according to the World Bank (2013). It is noteworthy that DFIs played a very important role in avoiding a drastic credit crisis in many developing economics, by intensifying their activities, in terms of deleveraging and increased risk avoidance by private agents (Calice, 2013). The challenge at present, is the manner in which adequate use of DFIs can be guaranteed, to safeguard against the deployment of some costly policy instruments, while ensuring they play a dynamic role in providing access to finance (Gutierrez, Rudolph, Homa and Blanco, 2011). With prevalent market failures in the provision of finance for infrastructure, agriculture, and housing, as well as small and medium enterprise (SME) finance, this is specifically relevant for Africa, and provides a strong rationale for DFIs to play an active developmental role. The study findings will help countries in Africa and finance professionals in investment and development banking, to improve their application of policies and procedures, in order to achieve the mission and vision of the proposed developmental projects. In addition, the research findings will serve as good reference material for scholars studying development finance, while the longterm benefit will result in assisting Investment bankers, DFIs, Donors, and individuals, as well as governmental institutions, to operate optimally in providing services to their customers more effectively. Although much has been done towards improving knowledge about African DFIs, to provide evidence on key areas to target., more research is, however, still needed (Calice, 2013). The aim of this study, therefore, is the analysis and evaluation of the perceived or real problem(s) associated with the effectiveness of development banks for African countries. In other words, to explore a comprehensive assessment of the development effectiveness of African DFIs to measure public policy performance and how it can enhance development financing. Both qualitative and quantitative methods of data collection were employed, to critically evaluate the development effectiveness of African Development Financial Institutions. Primary data, collected using online questionnaires, came from selected DFIs in the headquartered, corporate business environment in Johannesburg, South Africa and Lagos, Nigeria. A well-functioning, efficient and effective, international development financing system is essential for: global poverty reduction; improving living standards in developing countries; reducing worldwide inequalities; and for achieving the Millennium Development Goals (MDG), with feedback from respondents of this study indicating that much has been done by DFIs in Africa. The findings, indicate potential problem areas, with regards to environmental issues and their handling, as well as there being no proper stakeholders’ needs alignment, which could be due to collaboration issues, and/ or lack of training and experience. / XL2018

The objective of this three-essay dissertation are to develop a weighted cash conversion cycle (CCC_EVA) and empirically investigate its commensurability of corporate financial performance. Essay 1, titled "Supply Chain Finance: Developing a Weighted Cash Conversion Cycle to Proxy Operations Liquidity", presents the development and supporting empirical evidence of CCC_EVA measurability of operations liquidity. This essay shows the processes of scaling capital intensity and financing cost into time intervals captured by the traditional metric. Specifically, this essay investigates how accurately CCC_EVA indexes operations liquidity captured working capital, operational cash flow-to-modified working capital ratio, and quick ratio. The sample used in this essay consists of 4,333 firm-year observations of publicly traded industry classified firms listed on the U.S. exchange markets. The results of the empirical testing have statistically supported the essay hypotheses, that is CCC_EVA is a more accurate proxy of operations liquidity in comparison to the traditional metric (CCC_D). Essay 2, titled "Supply Chain Finance: Weighted Cash Conversion Cycle and Corporate Finance", expands the first essay findings by accounting for well-known financial measurements. Specifically, this essay examines the relations between CCC_EVA and operations liquidity and leverage, Market value, operating profitably and growth, and long-term asset management efficiency. This essay paper has used a sample of 24,127 firm-year observations of publicly traded firms listed on U.S. exchange markets from 1994 to 2016. The results support and extend the previous findings, that is CCC_EVA is a robust proxy of operations liquidity and can enhance its resiliency; maximize market value of corporate equity and debt; identify strategies to improve corporate profitability and credibility. Essay 3, titled "Supply Chain Finance: An Advanced Weighted Cash Conversion Cycle", advances the accuracy of CCC_EVA by differentiating between cash and credit forms of corporate sales and purchase transactions, and introducing operational cash flow into CCC_EVA. The advanced metric allows differences in inventory carrying cost and capital costs to be sources of the economic value added (EVA). Within a longitudinal case-based approach, the results show that the advanced metric is a potential decision tool to leverage on supply chain diversity and capitalize on its relation dynamics. Specifically, the implantation of the advanced metric can minimize the overall SC weighted average cost of capital (WACC) and its inventory carry cost (ICC); boost EVA of SC activities; and hedge liquidity risk. This three-essay dissertation has addressed the academic skepticism about CCC_D‘s commensurability by developing an advanced weighted metric (CCC_EVA) that accounts for capital intensity and financing cost. The three essays provide evidence of CCC_EVA testability and its adequacy of presenting corporate financial performance. The findings of this dissertation contribute to both industry and academia. Industry practitioners can implement CCC_EVA as a strategic decision instrument to balance SC liquidity distribution and resilience; hedge default risk of hidden deep-tier SC partners; increase overall SC profitability and creditability; boost equity value; and reveal existing opportunities of SC's EVA sources. Academically, these three essays initiate a fundamental and much-needed step for scholars to advance a systematically published metric, which can contribute to the implications, innovations, and knowledge of the SCF domain.

Jensen and Meckllng in "Theory of the Firm: Managerial Behavior and Capital Structure" [1976] introduced the concept that managers choose their ownership in the firm and leverage ratio to minimize agency costs. Easterbrook [1984] and Rozeff [1982] extended this notion with the hypothesis that dividends are paid to reduce equity agency costs. Myers [1977] explained debt agency costs as being a possible underinvestment problem with risky debt, and Jensen [1986] hypothesized that increases in debt could control the free cash flow agency problem. This dissertation will be a comprehensive test of Jensen and Meckling’s agency theory including extensions by Rozeff, Easterbrook, Myers and Jensen. To test agency theory a contemporaneous three equation model determining managerial ownership, leverage and dividends is specified. The exogenous variables include variables which are expected to impact upon agency costs, diversification measures, and variables registering non-agency explanations of leverage and dividends. This dissertation provides critically needed empirical evidence on the agency problem and a specific test of Jensen and Meckling. / Ph. D. / incomplete_metadata

The purpose of the project is two-fold. First, to design a curriculum guideline for career and technical educators to teach the elements of business planning to a new population of graduates that need the material to manage their vocation successfully. Secondly, it can be used as a very practical way of integrating academic and occupational training program.

Purpose This paper analyses the use of marketing metrics and marketing information and metrics contained in 2006/7 annual reports of companies listed on the Johannesburg Stock Exchange. The assumption is that the annual reports are the vehicle whereby listed companies communicate to their shareholders and other stakeholder constituencies. Methodology The assessment criteria is based on Ambler’s (2003) suggested marketing metrics and qualitative data is based on a checklist compiled from various academic sources. The elements which are assessed pertain to brand equity, other customer metrics, segmentation, competition, innovation and environmental and strategic aspects. The information obtained is compared to information required by investors and rating is done based on a grand total maturity. Findings Research results indicate that the use of quantitative metrics and qualitative data is very limited. The majority of companies display a lack of information pertaining to marketing. The results reflect a bi-modal tendency. Half (53%) of the companies do not provide any or poor information on their brand whereas 26% of companies supplied good and excellent information. The grand total score indicates that nearly two thirds (60%) of companies obtain a score of less than 50%, providing insufficient information. On the other hand, 27% of companies provide good and excellent information. Segmentation metrics are generally not reflected in annual reports, neither are competitors. Innovation and environmental aspects influencing market trends are covered by two thirds, however a third provides insufficient information. Other findings include that no standard reporting format exists. Information pertaining to marketing is spread throughout the annual reports. None of the companies provide a glossary of marketing definition or brand terminology. Research implications More in-depth research needs to be conducted on various industry sectors and amongst investors as to their needs. Originality/ value The paper is of value to corporate executives, marketing and communication practitioners who seek to improve communication and to convey optimal information for the investment community. The aim is to stimulate executive management to revise their relationship towards customers, the brand, marketing strategy and investors. / Graduate School of Business Leadership / MBL

South Africa abandoned its apartheid system in 1994, which enabled the country to be integrated into the global economy. Due to the lack of global competitiveness, between 70 and 80% of start-ups fail within five years (Goosain, 2004:23). People lost their jobs and the unemployment rate escalated from 17% to 28% (Kingdon and Knight, 2003). Government increased its support to small businesses in order to stimulate economic growth and development as an alternative means of job creation. However, studies conducted to determine the performance of small businesses reveal that most of these businesses fail irrespective of the support they receive from government due to a lack of financial management skills. The study being reported here investigated which financial management skills owners/managers of small business have and which ones are lacking in order to recommend appropriate training interventions required to develop and improve the financial management skills of such owners/managers and ultimately the management of their businesses. A literature review was conducted regarding the small business environment, training interventions and financial management skills. Financial management skill sets relevant to small business were identified and listed for empirical research purposes. Empirical research was conducted on the target population within the indicated geographical area. The study confirmed that most small business owners/managers have limited financial skills. Recommendations will be put forward on the type of skills future training needs to focus on. / Finance and Risk Management and Banking / M. Com. (Business Management)