Thesis (M.Dev.) --University of Limpopo, 2006 / The purpose of this study was to explore the challenges facing Mpumalanga Economic Empowerment Corporation (MEEC) in its quest to funding the emerging small enterprises in Mpumalanga. The study was conducted in 2004-2005, in the Nkangala District Municipality in Mpumalanga. Interviews were conducted amongst the existing clients of MEEC and its predecessors. Senior Managers and Operational staff were also interviewed in order to solicit the effectiveness of the tools used to granting loans and guarantees. The findings have since shown that there are operational challenges facing MEEC, which are in nature similar to those faced by a number of Development Finance Corporations in this country and around the globe as the benchmarks showed in the study. It was therefore important to undertake this study considering the need to improve the role played by MEEC and the approaches to be adopted in improving the course in which parastatals do business.

M.Com. / Small, medium and micro enterprise (SMME) prioritization is a collaborative effort by both the government and the private sector. The SA government called for support through the 1995 White Paper on National Strategy for the Development and Promotion of Small Business. The recent establishment (May 2014) of the Ministry of Small Business Development reinforces the strategic role of SMMEs in the South African economy. The prominent role played by SMMEs cannot be overemphasized...

Dissertation (PhD)--University of Stellenbosch, 2007. / ENGLISH ABSTRACT: This thesis is made of stand-alone essays on the capital structure and financing of Small and Medium Enterprises (SMEs) in Ghana and South Africa. Chapter Two reviews issues on SME development in Ghana and South Africa. Chapter Three compares the capital structures of large, quoted firms and SMEs in Ghana. The results show that quoted firms exhibit higher debt ratios than those of SMEs. The results suggest that age, size, asset structure, and profitability of the firm affect the capital structures of quoted firms and SMEs. For the SME, it is evident that level of education and gender of the entrepreneur, industry, and location of the firm are also important in explaining their capital structure. Chapter Four examines the determinants of bank financing of SMEs in Ghana. The results reveal that bank financing accounts for less than a quarter of SMEs’ debt financing, with short-term bank credit representing the greater proportion of bank finance. The results show that age, size, asset tangibility, and growth of the firm have positive associations with long-term bank debt, while profitability is negatively related to long-term bank debt. The short-term debt indicates a positive relationship with size, but negative relationships with profitability, and growth. Chapter Four also investigates the awareness and use of various financing schemes available to the Ghanaian SME sector. The results reveal low awareness and usage levels of these financing initiatives. Chapter Five explores the determinants of Ghanaian small and medium sized non-traditional exporters’ (NTEs) choice of formal/informal finance. The results show that NTEs depend on formal financing sources with bank finance representing the greater percentage of NTEs’ financing. The results suggest that, newer firms depend more on formal finance and less on informal finance. The results show positive relationships between formal finance and size, and growth of the firm. Chapter Six assesses how corporate governance affects the performance of SMEs in Ghana and what the implications are for financing opportunities. The results reveal that better corporate governance structures lead to better performance of SMEs. The paper concludes that the adoption of good corporate governance structures could lead to better management decisions and enable SMEs to attract financing resources. Chapter Seven examines the relationship between agency factors and the capital structure of quoted SMEs in South Africa. The results indicate that firms with one institutional blockholder are able to monitor the opportunistic behaviour of management more effectively than those with more than one institutional blockholders. Chapter Eight looks at the financial market and financing choice of SMEs and large firms in South Africa. The results indicate that developments in the financial market affect both longterm debt/equity and short-term debt/equity decisions of large firms. However, for SMEs, it is the long-term debt/equity decision that is affected by the financial market. The final essay examines the effect of debt policy on the performance of SMEs in Ghana and South Africa. The results indicate that long-term debt and total debt ratios negatively affect performance of SMEs. These findings have important implications for policy-makers, entrepreneurs and managers of SMEs. / AFRIKAANSE OPSOMMING: Hierdie tesis bestaan uit losstaande essays oor die kapitaalstruktuur en finansiering van kleinen middelgrootte-ondernemings (KMO's) in Ghana en Suid-Afrika. Hoofstuk Twee kyk na kwessies oor KMO-ontwikkeling in Ghana en Suid-Afrika. Hoofstuk Drie vergelyk die kapitaalstrukture van groot genoteerde maatskappye en KMO's in Ghana. Die resultate dui daarop dat genoteerde maatskappye groter skuldverhoudings as KMO's toon. Hierdie resultate wys ook dat ouderdom, grootte, batestruktuur en die winsgewendheid van die maatskappy die kapitaalstruktuur van genoteerde maatskappye en KMO's beïnvloed. Dit is vir die KMO voor die hand liggend dat die opvoedingsvlak en geslag van die entrepreneur, die bedryf en die ligging van die maatskappy ook belangrik is om die kapitaalstruktuur daarvan te verduidelik. Hoofstuk Vier ondersoek die bepalende faktore vir bankfinansiering vir KMO's in Ghana. Die resultate toon aan dat bankfinansiering rekenskap gee van minder as 'n kwart van die KMO se skuldfinansiering en dat korttermynbankkrediet die grootste gedeelte van die bankfinansiering verteenwoordig. Die resultate toon aan dat ouderdom, grootte, die tasbaarheid van bates en maatskappygroei op 'n positiewe verwantskap met langtermynskuld dui, terwyl winsgewendheid 'n negatiewe verband met langtermynbankskuld het. Die korttermynskuld toon 'n positiewe verwantskap met grootte maar 'n negatiewe verwantskap met winsgewendheid en groei aan. Hoofstuk Vier ondersoek ook die bewustheid en gebruik van verskeie finansieringskemas wat aan die Ghanese KMO-sektor beskikbaar is. Die resultate bring 'n lae bewustheid en gebruiksvlakke van hierdie finansieringsinisiatiewe aan die lig. Hoostuk Vyf verken die bepalende faktore van die Ghanese klein- en middelgrootte nie-tradisionele uitvoerders (NTU's) se keuse van formele/informele finansiering. Die resultate toon aan dat NTU's op formele finansieringsbronne staat maak en dat bankfinansiering die grootste persentasie van die NTU's se finansiering uitmaak. Uit die resultate kan afgelei word dat nuwer maatskappye meer op formele finansiering staat maak en minder op informele finansiering. Die resultate dui op 'n positiewe verwantskap tussen formele finansiering en grootte, en die groei van die maatskappy. Hoofstuk Ses evalueer die invloed van korporatiewe bestuur op die prestasie van KMO's in Ghana en watter implikasies dit vir finansieringsgeleenthede inhou. Die resultate toon aan dat beter korporatiewe finansieringstrukture by KMO's tot beter prestasie lei. Hierdie essay kom tot die gevolgtrekking dat die aanvaarding van goeie korporatiewe bestuurstrukture tot beter bestuursbesluite kan lei en KMO's in staat kan stel om finansieringsbronne te lok. Hoofstuk Sewe ondersoek die verwantskap tussen agentskapfaktorering en die kapitaalstruktuur van genoteerde KMO's in Suid-Afrika. Die resultate dui daarop dat maatskappye met een institusionele blokhouer die opportunistiese gedrag van bestuur meer doeltreffend kan monitor as dié met meer as een institusionele blokhouer. Hoofstuk Agt kyk na die keuses wat KMO's en groot maatskappye in Suid-Afrika ten opsigte van finansiële markte en finansiering maak. Resultate toon aan dat ontwikkelings in die finansiële mark besluite oor die langtermynskuld/aandelekapitaal sowel as die korttermynskuld/aandelekapitaal van groot maatskappye beïnvloed. By KMO's is dit egter besluite oor langtermynskuld/aandelekapitaal wat deur die finansiële mark beïnvloed word. Die laaste essay ondersoek die uitwerking van skuldbeleid op die prestasie van KMO's in Ghana en Suid-Afrika. Die resultate toon aan dat langtermynskuld en totale skuldverhoudings die prestasie van KMO's negatief beïnvloed. Hierdie bevindinge het belangrike implikasies vir beleidmakers, entrepreneurs en die bestuurders van KMO's.

Thesis (Ph.D.)--University of the Witwatersrand, Faculty of Commerce, Law and Management, Wits Business School, 2017. / The study is aimed at empirically investigating the dynamic interaction between the demand and supply factors affecting SMME access to credit in the Eastern Cape. The study is also aimed at conducting a comparative evaluation of lending criteria used by development finance institutions (DFIs) and commercial banks in evaluating SMME funding applications. The study is geared towards proposing a funding framework aligned to the characteristics of SMMEs which can be used by both DFIs and commercial banks to assess applications for SMME funding. In order to meet the objectives of the study, a sample of 80 SMMEs from the manufacturing, construction, services, agriculture, automotive, mining, security, merchandising and retail sectors was, through proportionate stratified sampling, selected from the population of all the SMMEs from the eight metropolitan and district municipalities (Nelson Mandela, Buffalo City, Joe Gqabi, Chris Hani, OR Tambo, Cacadu, Alfred Nzo and Amathole) constituting the Eastern Cape Province. Three separate structured open and closed-ended questionnaires were used to collect data from the 80 SMMEs owner/managers, 8 DFIs’ regional/branch managers and 5 major commercial banks branch managers in the province. The design of both questionnaires was underpinned by the credit rationing theoretical framework as well as the 5C’s of credit (capacity, collateral, capital, condition and character). A response rate of 100% was achieved. Content analysis and Relative Importance Index (RII) were used to analyse data. The results of the dynamic interaction between the supply and demand factors affecting SMME access to credit show that generally, there is an alignment between the SMME and the funding institutions survey results. This shows that the lending criteria of funding institutions are transparent. On the other hand, it is evident that there is poor awareness of the funding institutions criteria by SMMEs. SMMEs seem not to know what funding institutions are looking for when they evaluate funding applications. The results also pointed out that the characteristics of SMMEs in the study are representative of those of SMMEs countrywide. SMMEs in the study are characterised by poor/no business plans, lack of financial statements, lack of collateral, tax clearance certificates, poor cash flow, lack of owners’ contribution and lack of previous industry experience. The results also indicate that funding institutions’ lending criteria do not take into account the unique characteristics of SMMEs in the Eastern Cape. The results of the comparative evaluation of the lending criteria of DFIs and commercial banks show that there are no substantive differences between how commercial banks and DFIs evaluate the credit applications made by SMMEs. Both groups of lenders place significance on the business plans, financial statements, cash flows, owners’ contribution, collateral and experience of owner/managers. Moreover, the study also found that there is significant discrepancy between what the lending documentation of DFIs and commercial banks indicates as key requirements and what the survey results indicate. This means that what funding institutions practice is not congruent with what is enshrined in their lending criteria/policy. If we proxy lend in practice with what the key informants indicated as critical variables, the results show that both groups are more stringent in practice in key areas of their lending criteria. The review of the characteristics of SMMEs in South Africa showed that they lack collateral, are low on savings and experience. Furthermore, they have little capacity for writing business plans and cash flow management. The results here indicate that these are the very same areas which the financial institutions place significant importance on. The findings indicate that the lending criteria used by both groups tend to favour large and well established firms which have the required capacities. Based on the above findings, it is evident that in order to address the SMME access to credit constraint, a new framework that can be used by DFIs to lend to SMMEs needs to be developed. The framework must take into account the peculiar nature of SMME characteristics. Without such an approach, the funding gap for SMMEs in SA will continue. In response to the above findings, the study proposes that government must incentivise funding institutions to innovatively provide capacity building and training programmes targeted at improving the skills and expertise of their staff. It is proposed that DFIs should simplify their loan application forms to cater for the historically low literacy levels of SMMEs in the Eastern Cape. In addition, DFIs should adopt a more streamlined loan application process as well as a shared due diligence process. Credit application forms as well as key lending documents should be standardised. DFIs should conduct road shows to take their potential SMME customers through their application form, how they must be completed and the documents to accompany the form. SMMEs must be personally involved in the gathering of the relevant business plan information as well as in the writing up of their business plans. DFIs must organise quarterly workshops aimed at taking their potential clients through their lending criteria. The SEFA Credit Guarantee Scheme must be reviewed. Government must provide support to its venture capital industry by creating a good investment climate. The study proposes that a knowledge portal that will enable the sharing of knowledge and learning among SMMEs in the Eastern Cape be established. DFIs must set up SMME divisions or units to provide specialised credit services to their SMME customers. DFIs should evaluate SMME credit applications based on alternative risk evaluation methodologies such as the psychometric screening developed by the Harvard University’s Entrepreneurial Finance Laboratory. DFIs should explore alternative means of financing that do not require collateral. To increase SMME access to credit, government should establish specialised banks that can exclusively cater for the needs of the SMME sector. Government could consider granting certain incentives to funding institutions that actively promote SMME financing and have achieved a sizeable SMME loan book. / MT 2017

No abstract available. / Thesis (M.A.)-University of Natal, Durban, 1993.

Purpose of this treatise: The aim of this treatise is to identify the challenges facing emerging entrepreneurs in accessing funding for property development initiatives which results in high levels of declined loans thereby limiting participation in the property market as well as the interventions necessary to improve access to finance. Design / methodology / approach: The questionnaires were emailed to funding institutions and emerging property developers. The questionnaire investigates the respondents‟ perception of importance and evidence of questions on property development, finance and managerial skills drawn from the literature. Findings: The findings of this study are consistent with and support the findings of previous local and international literature on constraints that SME‟s have in accessing finance for various initiatives. The findings indicate that the emerging property developers in South Africa are characterised by insufficient number in representation in the property sector, high risk averse financial institutions that requires collateral to lend. The findings of the study indicate that broader and bolder initiatives aimed at improving the emerging property developer's representation in the market needs a holistic and collaborative approach from the various institutions to aide these entrepreneurs. Value of paper: The research is of importance to all stakeholders involved in the property sector, financial institutions and economic development of the SME sector. The results of the study will contribute to the understanding of the current financing limitations facing SMEs and will assist funding institutions to better understand the role and importance of effective collaboration in improving access to finance to emerging property developers.

Studies have shown that BBBEE parties are unsuccessful in raising banking finance due to a number of reasons. The objective of the enactment of the Broad Based Black Economic Empowerment (BBBEE) Act is primarily to promote the participation of black people in the economy. The measurement of BBBEE is determined by the codes of good practice for Qualifying Small Enterprises (QSE), which consists of seven elements namely: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. Enterprises with annual turnover ranging from R5 million and R35 million qualify as QSE. These elements measure the level of BBBEE status. The enactment of the National Credit Act replaced the Usury Act, 1968 and the Credit Agreements Act, 1980. The objective of the act is to promote accessibility to the credit market and to prevent the over-indebtedness of consumers. The Act is applicable to natural persons with contractual capacity and juristic persons with monetary assets or annual turnover of less than R1 million. This study aims to establish the facilitation of access to banking finance for BBBEE SME’S within the George and Mossel Bay area as these towns form part of the Garden Route Business Banking Division of Nedbank. The effect of the BBBEE and NCA on the accessing of banking finance was studied and analysed. Credit applications are subject to stringent credit scoring systems to rate applicants, monitor performance and manage accounts. The Basel rating which measures the minimum level of capital a bank should hold to protect investors determines the interest rate charged for loans. These ratings affect the accessibility of banking finance. A framework for bank and SME relationship building shows the relationships between: • The accounts manager’s role in relationship management; • Branch staff role in relationship management; • Corporate policies as part of relationship management. A survey was conducted in the form of a questionnaire in order to obtain primary information from two sample groups, banking officials and BBBEE clients to establish the relationship between the two sample groups. Quantitative techniques were used and the data obtained from the two sample groups were analysed. The study revealed that the by establishment of relationships between BBBEE clients and banking officials would facilitate access to banking.

A Thesis submitted to the Wits School of Governance in fulfilment of the requirements for the Degree of Doctor of Philosophy University of the Witwatersrand Johannesburg 2015 / The Development Finance Institutions (DFIs) in South Africa have a mandate to provide finance to private and public sector organizations for investments that facilitate development. The main aim of DFIs is to invest in areas where the market fails to invest adequately and where there are institutional failures. DFIs specialise in offering long-term advances and loans and where defaults are experienced by investors, they are able to re-structure the loans to facilitate easier repayments. However, there are allegations of maladministration and poor management within DFIs as well as a high failure rate of funded enterprises. This study set out to explore the effectiveness of the DFIs by reviewing their contribution to economic growth in KwaZulu-Natal (KZN). This study evaluated the role and effectiveness of four DFIs in the province, namely Ithala; Industrial Development Corporation (IDC); National Empowerment Fund (NEF); and Trade and Investment KwaZulu-Natal.The study attempts to answer the following questions: 1) Have the DFIs made a positive contribution to the economy in KZN based on their performance indicators? 2) How do the DFIs take funding decisions? 3) What is the success rate of the DFIs in creating sustainable businesses? 4) What support and monitoring mechanisms are in place in these DFIs to ensure that funded enterprises succeed? 5) What general performance issues face DFIs? The qualitative research approach was used in this study as the investigation was exploratory in nature. Data was collected using three different instruments: document analysis, structured questionnaires, and face-to-face interviews. The document analysis enabled the design and customization of the questionnaires used to collect data from different DFIs. Organisational effectiveness models and performance management theories were used as a reference to assess the effectiveness (performance) of the DFIs in KZN. The study found that the level of performance of the DFIs varied, as did their capacity and resources. All the DFIs made a positive contribution to the economy of the province, taking into consideration that some of the thriving small, medium and micro enterprises (SMMEs) could not have started without the funding A review of the effectiveness of Development Finance Institutions in KwaZulu-Natal from these DFIs. There is however, massive room for improvement in DFI operations and level of contribution to the economy of the province. The study identified a number of weaknesses in the operations of the DFIs, such as their financial statements, which are characterised by high annual debt write-offs, high impairment rates, and low rates of loans and advance repayments. While there is evidence of job creation by each DFI, the rate thereof may not be commensurate with the costs involved. The study revealed that in some cases, funded enterprises are not supported to ensure that they succeed in creating sustainable businesses. A number of portfolios closed down prematurely leading to the need to write off loans. The yearly performance targets set by the DFIs are mostly not achieved; in some cases, these performance targets do not measure the actual performance towards the achievement of the DFI’s strategic objectives. There are too many DFIs in South Africa, some operational in all the provinces, a number of which were established during the apartheid era and may have been relevant at that time. At a macro level, there is a need to streamline DFIs in order to give relief to the fiscus. Increasing the efficiency of the DFIs would require a culture change with respect to information sharing and reporting to stakeholders. It is recommended that DFIs adhere to the funding criteria for each fund. This capacity to evaluate funding proposals needs to be reviewed continuously to avoid fruitless expenditure emanating from funding unsustainable business ventures. Effective monitoring of funded enterprises and implementation of an early warning system are recommended. Failure to repay loans and advances should have some consequences for enterprises in order to discourage perceptions of entitlement from most SMMEs, while at the same time DFIs should develop a tolerance level (a materiality framework) for non-performance of some of the loans and advances as a cost for creating/promoting entrepreneurship in South Africa. / MB2016

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management specialising in Entrepreneurship and New Venture Creation, 2016 / Despite the significant role that SMMEs play in the growth of developed and developing economies, they are often plagued by various constraints. Access to finance is considered as one of the major constraints that exist within businesses and is also a consequence of other issues which create an impediment towards the success of SMMEs which compromises the growth of any given economy. The pervasive issue on the lack of access to finance tends to be greater for informal businesses as opposed to formal businesses due to various aspects, such as the entrepreneurial attributes that informal business owner-managers have, which are indeed found to be lacking, consequently leading to circumstances where banks reject loan applications made by these businesses, suppliers reject any request of trade credits made by the owner-managers operating these businesses and potential investors find these businesses to be less attractive when investing for future returns. This study has examined certain determinant factors that are embedded within the theory of entrepreneurship which are perceived to be some of the factors which in essence are considered as success drivers for the growth of all forms of businesses. More importantly, these factors have been closely analysed in the context of informal businesses with regard to whether they prove to be important factors to soliciting finance which is considered a crucial resource for the growth of informal SMMEs. In examining the perceived importance of each of these factors in relation with access to finance, as well as the perceived importance of finance in leading to growth of informal SMMEs, a self-administered questionnaire was distributed across 385 informal business owner-managers in the Gauteng province. Given that the nature of the study was quantitative, descriptive and inferential statistics were performed on the data. Various statistical methods, such as correlation analyses and multiple regressions, were employed to test the proposed hypotheses associated with the relationship of social capital, and human capital to the access to finance, and access to finance on growth. The findings reflected that social capital and human capital are important factors to accessing finance. Furthermore, access to finance is an important factor in the growth of SMMEs in the informal sector. The study contributes towards addressing the existing gap in the knowledge base regarding the determinants of financial access for SMMEs. It also contributes towards providing direction to policy makers involved in enterprise development to reach out to informal business ownermanagers by providing training to these entrepreneurs so as to improve their social and human capital and grow their businesses to graduate into the formal sector as their contribution is needed to grow the South African economy / GR2018

Thesis (M.M.(Finance & Investment)--University of the Witwatersrand, Faculty of Commerce, Law and Management, Wits Business School, 2017 / This study investigated whether the financial sector (private and public) is accessible to the SME’s and entry level entrepreneurs dominated by Black and poor people. The study employed a comparative analysis method; it compared the structure of the South African financial sector to those of India and Brazil, as newly industrialised countries. The finding indicates that the South African financial sector lacked the presence of state-owned financial institutions as in the comparable NCI countries to support SMEs and entry level Black entrepreneurs. The study then recommended the creation of state-owned microfinance institutions, whose performance will determine the need of state-owned banks / GR2018