A research report submitted to the Faculty of Management, University of
the Witwatersrand, in partial fulfilment of the requirements for the
degree of Master of Management (in the field of Public and Development
Management). / Many debates have been waged about the effect of the interest rate ceilings
on the provision of financial services to small businesses. It has been
considered as one of the major constraints in small business access to capital
and it is also considered a major inhibitor of small business development. The
present study attempted to determine whether interest rate ceilings should be
undertaken or not, and how in a South African socio-political context this
would help small business development. Concomitantly, it was considered
how the interest rates affect small businesses according different purposes,
size and terms of loans.
A case study method was used to pursue this research. The case study of
Mamelodi Township (Pretoria) and Kildare/Jonkllanqa village (Mhala District -
Northern Province) were undertaken. Open-ended interviews with borrowers
and financial institutions (providers) were conducted. The result of the
interviews was analysed and reinforced with an analysis of national and
international secondary literature.
One of the main findings of the research was that interest rates ceiling are
necessary and substantial in helping small business development. It was
established that interest rate ceilings have to be considered in a flexible
manner, accordlng specific conditions of small business activity. It was also
concluded that interest rate ceilings have to be a consequence of a regulatory
framework which enables small business access to capital, and, thus,
development of their local community. The result of the research likewise, has
indicated that for small, short term, working capital loans, the impact of
interest rates on borrowers is smaller than for larger, longer term borrowers.
The effect of the circulation of resources in a community in the case of a lower
level interest rates deserves more investigation but there are primary
indications of some positive impact on. / Andrew Chakane 2019
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/26385 |
| Date | January 1998 |
| Creators | Zandamela, Horácio Lucas |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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