Credit risk management in development finance institutions and SMME sustainability
- Authors: Derrocks, Velda Charmaine
- Date: 2017
- Subjects: Credit -- Management Business enterprises -- Finance , Small business -- Finance
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/14862 , vital:27884
- Description: Small, Medium and Micro Enterprises (SMMEs) make a significant contribution to the South African Economy. Regardless of size, these businesses have the ability to create employment, make a generous contribution to tax collections, uplift communities and serve as a beacon of hope for those trapped in the cycle of poverty and unemployment. However, SMMEs lack access to much-needed financial resources that are critical for their growth. Development Finance Institutions (DFIs) aim to bridge the gap between the SMME’s financial needs and the development of the respective SMME businesses, by providing funding to entrepreneurs with potentially viable businesses and ideas. Debt funding to these SMMEs are based on sound commercial lending principles that take various non-quantitative variables into account. The sustainability of SMMEs is a primary concern to all participants in the economy, as it is known that SMME failure rates are high Therefore, the primary objective of this study was to investigate the impact that the credit risk management practices of DFIs have on the sustainability of SMMEs, by examining a case study of a typical DFI. An electronic questionnaire survey was considered as an appropriate measurement method for this study. The targeted population of the study included SMMEs in the Eastern Cape that are Trust for Urban Housing (TUHF) clients and 23 SMMEs were identified as part of the study sampling frame. A total number of 14 questionnaires were returned out of the 23 targeted SMMEs - giving a response rate of 61%. The quantitative data was processed using the STATISTICA program, leading to appropriate descriptive statistical analyses. In order to better understand the impact of credit risk management practices on the sustainability of SMMEs, a hypothesis was formulated and linear regression analysis was used to establish the statistical significance of certain credit risk principles and sustainability characteristics. The results of the empirical study revealed that credit risk management practises do impact on the sustainability of SMMEs. Further, by testing the hypothesis, it was also revealed that certain sustainability variables are regarded as more important than others.
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- Date Issued: 2017
The challenges of banks in financing SMEs in Harare, Zimbabwe
- Authors: Msimanga, Dumisile
- Date: 2017
- Subjects: Small business -- Finance , Business enterprises -- Zimbabwe -- Harare -- Finance Credit -- Zimbabwe -- Harare Entrepreneurship -- Zimbabwe -- Harare
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/14058 , vital:27412
- Description: This research is a diagnosis of the supply side of SME (small and medium enterprises) credit. Its objectives are to determine the current level of bank lending to SMEs to validate the financing gap, to explore the strategies and mechanisms employed by banks to provide tailor-made lending for SMEs and finally to conclude by identifying some of the key challenges the banks face in their quest to lend to SMEs. This, then, culminated in some recommendations for increasing bank funding to SMEs. This study employed a deductive qualitative research.. The research used a non-probability, purposive/judgmental sampling method to choose the heads of bank SME units to include in the research. There are twelve banks with dedicated SME units, out of a total of 18. The researcher carried out in-depth face to face interviews using semi-structured questions. The qualitative data was coded, deductively analysed and conclusions drawn and incorporated into a report. Banks’ most outstanding challenges in dealing with SMEs in terms of information asymmetry, an unsupportive business environment, poor quality of SME clients and inflexible regulatory requirements.
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- Date Issued: 2017