Financing tools, firm life cycle and growth of small, medium and micro enterprises in selected sub-Sahara African economies
- Ngonisa, Phillip https://orcid.org/0000-0002-0145-9062
- Authors: Ngonisa, Phillip https://orcid.org/0000-0002-0145-9062
- Date: 2022-03
- Subjects: Small business -- Finance , Small business -- Africa
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10353/21794 , vital:51754
- Description: Finance is of paramount importance for small, medium and micro enterprises’ (SMMEs) growth, without which many firms fail to move along their growth continuum. Against this background, the study sought to examine the growth effects of financing tools across the different phases of SMMEs' life cycle in Sub Sahara Africa (SSA) economies for the period spanning from 2003 to 2019. Firstly, due to the inherent heterogeneity nature of the SMMEs' financing landscapes across the world, the study starts by identifying the commonly used financing tools in the context of Sub-Saharan Africa. These were found to be internal finance, bank debt, trade credit, non-bank finance and informal finance, with internal finance being the most prevalent financing tool. The second aspect of the study was to examine the growth effects of the identified financing tools on SMMEs' performance in Sub Sahara Africa. In achieving this objective, several panel estimation techniques were employed, which are the feasible generalised least squares (FGLS), cross-sectional dependence (SCC), random effects model (REM) and pooled ordinary least squares (POLS). The empirical results show that internal finance or savings, bank financing, trade credit, non-bank financing and informal financing are positive and statistically significant in explaining SMMEs growth in the region, with stronger evidence for a positive relationship between external finance (trade credit and bank finance) on SMMEs growth in Sub-Saharan African region. The third objective of the study was to investigate the growth effects of SMMEs’ financing tools across different phases of the firm life cycle. The same panel techniques as used in achieving the previous objective were utilized again. The empirical findings show that the growth effects of SMME financing tools evolve as SMMEs move along their growth continuum, and only bank finance proved to be a fundamental variable for SMMEs growth throughout the different phases of firm growth. Finally, motivated by SMMEs’ high dependence on internal finance or savings, the study explored the saving practices of SMMEs in Sub Saharan Africa using thematic analysis. The study findings show that SMMEs in Sub Sahara African economies systematically save through formal and informal financial systems. These findings are contrary to conventional wisdom, which suggests that SMMEs are a financial basket case. Basing on the study findings, policies aimed at reducing or lessening the burden of accessing finance are important to stimulate the growth of SMMEs. Most importantly, there is a need for lenders and sponsors to understand the firm life cycle-financing tool nexus to ensure SMMEs growth. Moreover, SMMEs in Sub Sahara African economies need to cultivate a spirit of thrift to minimize firm attrition rate, thereby promoting SMMEs' growth in the region. , Thesis (PhD) -- Faculty of Management and Commerce, 2022
- Full Text:
- Authors: Ngonisa, Phillip https://orcid.org/0000-0002-0145-9062
- Date: 2022-03
- Subjects: Small business -- Finance , Small business -- Africa
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10353/21794 , vital:51754
- Description: Finance is of paramount importance for small, medium and micro enterprises’ (SMMEs) growth, without which many firms fail to move along their growth continuum. Against this background, the study sought to examine the growth effects of financing tools across the different phases of SMMEs' life cycle in Sub Sahara Africa (SSA) economies for the period spanning from 2003 to 2019. Firstly, due to the inherent heterogeneity nature of the SMMEs' financing landscapes across the world, the study starts by identifying the commonly used financing tools in the context of Sub-Saharan Africa. These were found to be internal finance, bank debt, trade credit, non-bank finance and informal finance, with internal finance being the most prevalent financing tool. The second aspect of the study was to examine the growth effects of the identified financing tools on SMMEs' performance in Sub Sahara Africa. In achieving this objective, several panel estimation techniques were employed, which are the feasible generalised least squares (FGLS), cross-sectional dependence (SCC), random effects model (REM) and pooled ordinary least squares (POLS). The empirical results show that internal finance or savings, bank financing, trade credit, non-bank financing and informal financing are positive and statistically significant in explaining SMMEs growth in the region, with stronger evidence for a positive relationship between external finance (trade credit and bank finance) on SMMEs growth in Sub-Saharan African region. The third objective of the study was to investigate the growth effects of SMMEs’ financing tools across different phases of the firm life cycle. The same panel techniques as used in achieving the previous objective were utilized again. The empirical findings show that the growth effects of SMME financing tools evolve as SMMEs move along their growth continuum, and only bank finance proved to be a fundamental variable for SMMEs growth throughout the different phases of firm growth. Finally, motivated by SMMEs’ high dependence on internal finance or savings, the study explored the saving practices of SMMEs in Sub Saharan Africa using thematic analysis. The study findings show that SMMEs in Sub Sahara African economies systematically save through formal and informal financial systems. These findings are contrary to conventional wisdom, which suggests that SMMEs are a financial basket case. Basing on the study findings, policies aimed at reducing or lessening the burden of accessing finance are important to stimulate the growth of SMMEs. Most importantly, there is a need for lenders and sponsors to understand the firm life cycle-financing tool nexus to ensure SMMEs growth. Moreover, SMMEs in Sub Sahara African economies need to cultivate a spirit of thrift to minimize firm attrition rate, thereby promoting SMMEs' growth in the region. , Thesis (PhD) -- Faculty of Management and Commerce, 2022
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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:
- 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.
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Deriving value from IT investments within botique hotels: a Buffalo City case study
- Authors: Mathe, Thabelang
- Date: 2009
- Subjects: Information technology , Hotels -- Finance , Boardinghouses -- Finance , Small business -- South Africa -- Eastern Cape , Small business -- Finance
- Language: English
- Type: Thesis , Masters , MCom (Information Systems)
- Identifier: vital:11134 , http://hdl.handle.net/10353/d1000975 , Information technology , Hotels -- Finance , Boardinghouses -- Finance , Small business -- South Africa -- Eastern Cape , Small business -- Finance
- Description: Even though many organizations invest in IT, the value that IT is expected to contribute is still not clearly understood. Researchers agree that IT has become a crucial element to business operations and business existence. However, while there is continued investment in new information technologies and systems, organizations are not certain whether significant value is derived from IT investments. The failure to realize good return on IT investments is ascribed to a lack of understanding of IT by organizations and also the failure by organizations to align IT strategies with business strategies. The lack of alignment leads to the failure to match the right IT to the correct task, which leads to the poor application of systems and poor allocation of human resources to tasks. Therefore, organizations such as Small and Medium Enterprises (SMEs) in particular Boutique Hotels, are noted for their failure to derive better IT value. Their unique characteristics are understood to be influential in the way IT is used and managed by affecting the delivery of value from technology. In order to enable Boutique Hotels to derive more value from IT, the IT governance frameworks, Val IT and CobiT (ITGI, 2007), were examined as these integrate good practices to ensure that an organization‘s IT supports the business objectives. In addition, the Task Technology Fit (TTF) (Goodhue and Thompson, 1995) and Gap Analysis (Heeks, 2001) theories were highlighted as these prescribe the platform ideal for more value to be derived from IT. The current status of Boutique Hotels in Buffalo City was assessed through the use of questionnaires and interviews. The collected data was analyzed and resulted in the development of a model that can be used by Boutique Hotels in order to derive more value from IT and to maximize the use of IT.
- Full Text:
- Authors: Mathe, Thabelang
- Date: 2009
- Subjects: Information technology , Hotels -- Finance , Boardinghouses -- Finance , Small business -- South Africa -- Eastern Cape , Small business -- Finance
- Language: English
- Type: Thesis , Masters , MCom (Information Systems)
- Identifier: vital:11134 , http://hdl.handle.net/10353/d1000975 , Information technology , Hotels -- Finance , Boardinghouses -- Finance , Small business -- South Africa -- Eastern Cape , Small business -- Finance
- Description: Even though many organizations invest in IT, the value that IT is expected to contribute is still not clearly understood. Researchers agree that IT has become a crucial element to business operations and business existence. However, while there is continued investment in new information technologies and systems, organizations are not certain whether significant value is derived from IT investments. The failure to realize good return on IT investments is ascribed to a lack of understanding of IT by organizations and also the failure by organizations to align IT strategies with business strategies. The lack of alignment leads to the failure to match the right IT to the correct task, which leads to the poor application of systems and poor allocation of human resources to tasks. Therefore, organizations such as Small and Medium Enterprises (SMEs) in particular Boutique Hotels, are noted for their failure to derive better IT value. Their unique characteristics are understood to be influential in the way IT is used and managed by affecting the delivery of value from technology. In order to enable Boutique Hotels to derive more value from IT, the IT governance frameworks, Val IT and CobiT (ITGI, 2007), were examined as these integrate good practices to ensure that an organization‘s IT supports the business objectives. In addition, the Task Technology Fit (TTF) (Goodhue and Thompson, 1995) and Gap Analysis (Heeks, 2001) theories were highlighted as these prescribe the platform ideal for more value to be derived from IT. The current status of Boutique Hotels in Buffalo City was assessed through the use of questionnaires and interviews. The collected data was analyzed and resulted in the development of a model that can be used by Boutique Hotels in order to derive more value from IT and to maximize the use of IT.
- Full Text:
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