- Title
- The development of a framework to assess the effectiveness of the existing viability based lending format of development funding institutions to facilitate increased financial inclusion; recent evidence from the SME sector in Kwazulu-Natal, South Africa
- Creator
- Mkhize, Bukhosi Walter
- Subject
- Gqeberha (South Africa)
- Subject
- Eastern Cape (South Africa)
- Subject
- South Africa
- Date Issued
- 2021-04
- Date
- 2021-04
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/52999
- Identifier
- vital:44867
- Description
- Small and medium enterprises (SMEs) internationally have a significant involvement in global economies, as they often are key drivers of economic growth through job creation, increasing production volumes, increased exports and imports. SMEs’ access to development finance and other financing products in the market remains one of the most significant constraints to the establishment, survival, growth, and productivity of SMEs. The South African Government has enacted policies to support SME development and enhance financial inclusion; however, the financing gap has proven to be persistent. Most SMEs cannot access various development and commercial credit funding due to a number of reasons, such as: the detailed complex financial documentation, own contribution and collateral required by finance institutions to grant loan finance; high cost involved in raising loan funding and high punitive interest rates due to the perceived high risk nature of the SMEs; and long time frames for the economic viability and business sustainability assessment processes for credit approval. In this study, a broad analysis of a viability based lending format of a development funding institution was conducted with the intention to develop a framework to assess its effectiveness to facilitate increased financial inclusion in the SMEs sector in KwaZulu-Natal. The study used the literature review to identify key factors that have an impact on economic viability and business sustainability/feasibility in terms of how these factors influence perceived financial inclusion of SMEs. The empirical section of the study tested SMEs’ perceptions and understanding of the concepts that influence the economic viability and business sustainability/feasibility of the SME sector. Strong evidence emerged from the empirical study that SMEs lack crucial resources such as own contribution to achieve an optimal equity structure in the business, lack of grant funding information available to support SMEs, lack of collateral required for funding security, lack of business support available to SMEs to compile comprehensive business plans and lack of own resources to manage various aspects of the business. Without appropriate coordination of the SMEs’ ecosystem, financial inclusion for SMEs will remain a challenge.
- Description
- Thesis (MBA) -- Faculty of Business and Economic Sciences, NMU Business School, 2021
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xix, 105 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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