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The role played by business development services providers (BDSs) in improving access to finance by start-up SMEs in the Buffalo City Municipality

  • Authors: Musara, Mazanai
  • Date: 2010
  • Subjects: Small business -- Finance , New business enterprises , Business enterprises -- Finance , Corporations -- Finance , Small business marketing
  • Language: English
  • Type: Thesis , Masters , M Com (Business Management)
  • Identifier: vital:11315 , http://hdl.handle.net/10353/359 , Small business -- Finance , New business enterprises , Business enterprises -- Finance , Corporations -- Finance , Small business marketing
  • Description: 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.
  • Full Text:

Business Management: BEC 121 & 121E

Introduction to Financial Management: BEC 311 & 311E

  • Authors: Fatoki, O O , Rowles, M , Tait, M
  • Date: 2009-07
  • Subjects: Business enterprises -- Finance
  • Language: English
  • Type: Examination paper
  • Identifier: vital:17443 , http://hdl.handle.net/10353/d1010254
  • Description: Introduction to Financial Management: BEC 311 & 311E, Supplementary examination January 2009.
  • Full Text: false
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