The potential of small and micro-enterprises (SMEs) in promoting economic growth in both developed and developing countries is widely accepted and documented by both scholars and policy makers. Lack of access to sufficient financing for these SMEs, especially in developing countries, has been identified as a major bottleneck in realising this potential. Bank credit is one of the major ways of addressing the challenge of inadequate funding that exists in the SME sector. This study was undertaken in order to explore the experiences of bank loan officers and SME borrowers in credit extension to the SME sector in Uganda. The research methodology used multiple methods of data collection which enabled an element of triangulation to be built into the study design. Data was collected both from the supply-side (bank loan officers) and the demand-side (SME borrowers), and entailed unstructured and semi-structured interviews and a questionnaire survey of loan officer and SME borrower experience. Further data was collected through direct observation of the interactive interviews between loan officers and borrowers, which enabled a unique opportunity to enhance the understanding of experiences of loan officers and borrowers. This method offers a development of extant methodologies that have been used to assess bank lending to SMEs, typically indirect methods such as verbal protocols and hypothetical business plans. The supply-side findings suggest that, in addition to the bank lending guidelines and procedures, the organisational context in terms of institutional structure, borrower attributes (especially their knowledge of bank lending guidelines and procedures) and level of congruence between loan officers and organisational goals are important determining factors of credit flow to SMEs. This implies that the context in which lending guidelines are implemented is as vital as the application of these guidelines. Banks are, therefore, challenged to ensure a favourable organisational context in order to facilitate loan officer decisions. On the credit demand side, it was found that borrowers seek to play an active role in the lender-borrower relationship which, in turn, influences decisions made by loan officers. It was established that, in pursuit of this role, borrowers deliberately pre-plan loan requests in an effort to influence the results of the evaluation of their loan applications by loan officers. At times, borrowers intentionally manipulate the information they disclose to loan officers in order to enhance their chances of obtaining credit from banks. The findings also suggest that, in most cases, the borrowers with some knowledge of bank lending guidelines and procedures find it easier to access credit than their counterparts who lack this knowledge. With regard to women-owned SMEs, while there little evidence of ‘official’ discrimination against women-owned SMEs by bank lending policies, there are systematic, cultural, social and legal impediments that lead most women-owned SMEs to access lower levels of credit than their male counterparts. The study recommends that banks should design lending guidelines that integrate both supply and demand factors, instead of focusing only on supply factors like project viability and collateral availability. It is also recommended that banks should develop comprehensive training programmes for borrowers about all aspects of the lending transaction in order to positively influence them. It is further recommended that there should be more consultations with loan officers and borrowers in order to develop a mutually acceptable set of lending policies. This approach, which integrates bank management, loan officers and borrowers in drawing up lending guidelines and procedures, is likely to minimise information asymmetry in SME lending decisions and create a more conducive environment for promoting credit availability to the Ugandan SME sector.

Thesis (MA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: In the business sector of the Information Society, information plays a crucial role in giving an enterprise a competitive advantage. Information as a resource in a small enterprise includes internally produced information, information obtained from the external environment as well as the knowledge residing in people's heads. However, this information and knowledge needs to be processed and recorded in physical formats for the purposes of decision-making and problem solving as it is part of the information resources of the small enterprise. This study explored the extent of information and knowledge management in developing communities' small enterprises in pursuit of survival and success. A deeper understanding of the business information needs, sources of information, frustrations and problems were investigated in order to establish and meet the specific needs of small enterprises in developing communities. More specifically, the objective of the study was to promote effective information organisation in small enterprises, with special reference to developing communities, as a means to support economic and social development of South Africa. For data gathering, a questionnaire was developed and distributed to owner/managers of 17 small enterprises in Kayamandi, a developing community in the Stellenbosch area. The purpose was to determine owner/managers's needs with regard to information organisation and to identify existing systems, tools and procedures that might be appropriate for this sector. The results indicated the absence or insufficient business education of owner/managers in Kayamandi, which has a damaging effect on their ability to acquire the information they need for their daily business work and operational activities. Moreover, the owner/managers do most of their information gathering using a variety of informal sources, and that information is not organised in information packages. This, in tum, affects their business development. Information should interact with tacit knowledge to improve the quality of work. In addition, the oral tradition should be promoted because it plays an important role in the daily running of the small enterprises in developing communities. In that sense, owner/managers should create an environment that can assist in knowledge sharing from various information sources. Maintaining such knowledge as information in retrieval based information systems could assist owner/managers in the overall functioning of their businesses because they are faced with the challenge of responding effectively to changing customer expectations. An affordable information system model is recommended and structured to fit owner/manager's work habits. The arrangement of information resources in the system can be used for categorisation of information either in a manual or electronic system. / AFRIKAANSE OPSOMMING: In die sakesektor van die Inligtingsamelewing speel inligting 'n kritieke rol om aan 'n onderneming 'n mededingende voorsprong te bied. Inligting as hulpbron in 'n klein onderneming sluit in intern-geproduseerde inligting, inligting wat uit die eksterne omgewing verkry word, asook die kennis wat in mense se koppe is. Dié inligting moet egter verwerk en vasgelê word in fisiese formate met die oog op besluitneming en probleemoplossing, aangesien dit deel is van die inligtingshulpbronne van die klein onderneming. Hierdie studie verken die omvang van inligtings- en kennisbestuur in ontwikkelende gemeenskappe se klein sake-ondernemings met die oog op oorlewing en sukses. 'n Dieper begrip is gesoek van die sake-inligtingsbehoeftes, bronne van inligting, frustrasies en probleme ten einde die spesifieke behoeftes van 'n klein onderneming te bepaal en daaraan te voldoen. Meer bepaald was die doel van die studie om effektiewe inligtingsorganisering in klein ondernemings te bevorder, met spesifieke verwysing na ontwikkelende gemeenskappe, as 'n manier om ekonomiese en sosiale ontwikkeling in Suid-Afrika te bevorder. Met die oog op dataversameling is 'n vraelys ontwikkel en versprei onder eienaarslbestuurders van 17 klein ondernemings in Kayamandi, 'n ontwikkelende gemeenskap in die Stellenbosch-gebied. Die doel was om eienaars/bestuurders se behoeftes met betrekking tot inligtingsorganisering te bepaal en stelsels, werktuie en prosedures te identifiseer wat vir hierdie sektor toepaslik sou wees. Die uitslae dui op die afwesigheid of ontoereikendheid van sake-opleiding onder die eienaars/bestuurders in Kayamandi, wat 'n skadelike uitwerking het op hul vermoë om die nodige inligting te bekom vir hul daaglikse sake-bedrywighede en operasionele aktiwiteite. Verder hanteer die eienaarslbestuurders grotendeels hul eie inligtingsversameling deur gebruik te maak van 'n verskeidenheid informele bronne, en hierdie inligting word nie in inligtingspakkette georganiseer nie. Dit beïnvloed op sy beurt hul sake-ontwikkeling. Inligting behoort in wisselwerking te wees met versweë kennis ten einde die kwaliteit van werk te verbeter. Daarby behoort die mondelinge tradisie bevorder te word, want dit speel 'n belangrike rol in die daaglikse bestuur van die klein sake-ondernemings in ontwikkelende gemeenskappe. In daardie opsig behoort eienaars/bestuurders 'n omgewing te skep wat kan help met kennisdeling vanuit verskeie inligtingsbronne. Die instandhouding van sulke kennis as inligting in herwinningsgebaseerde inligtingstelsels, sou eienaarslbestuurders kon help in die algehele funksionering van hulondernemings, want hulle staar die uitdaging in die gesig om effektief te reageer op veranderende klanteverwagtinge. 'n Bekostigbare inligtingstelselmodel word aanbeveel en gestruktureer om by eienaarslbestuurders se werksgewoontes te pas. Die rangskikking van inligtingsbronne in die stelsel kan gebruik word vir die kategorisering van inligting óf in 'n hand- óf in 'n elektroniese stelsel.