Business plans in bank decision-making when financing new ventures in South Africa

By M. Pretorius, Gordon Shaw. 2004

113 citations recorded by the source corpus.

This article focuses on the position that South African commercial banks adopt when evaluating an application for finance of new business ventures. The role and importance of the business plan in the decision-making process is highlighted and investigated. This article begins to qualitatively describe the decision-making processes, criteria and processes instituted by the four major South African commercial banks that between them serve 96 per cent of the banking services for small business. It then questions the barriers placed on applicants applying for finance and recommends how these barriers can be removed. The article concludes that banks finance business ventures with poor potential for success if the applicant is creditworthy or has the necessary security rather than assist applicants with good plans and ventures with potential, but lacking sufficient security.

Subfields: Accounting, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/0109a22806eee4dc98330e7cde138532401fa32c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Lynety Chindoga
2. A. Smit
3. Zhongzhi He
4. A. Kira
5. A. Odeyemi
6. O. Fatoki

In Management of Technology and Innovation

1. Lynety Chindoga
2. A. Smit
3. Zhongzhi He
4. A. Kira
5. A. Odeyemi
6. O. Fatoki

Citations in the corpus

• AN INVESTIGATION INTO THE OBSTACLES TO YOUTH ENTREPRENEURSHIP IN SOUTH AFRICA (2011, background): “Pretorius and Shaw (2004) observe that a large percentage of the failure of entrepreneurial ventures in South Africa is attributed to inadequate capital structure or resource poverty.”
• Which New Small and Medium Enterprises in South Africa Have Access to Bank Credit (2010, background): “The results are consistent with the findings of Pretorius and Shaw (2004) and Kitindi et al. (2007).”
• The Impact of Firm Characteristics in Access of Financing by Small and Medium-sized Enterprises in Tanzania (2012, background): “Pretorius and Shaw (2004) observed that accessibility to external finance is essential to solve shortage of SMEs cash flows.”
• Factors affecting the performance of small and medium enterprises in KwaZulu-Natal, South Africa (2016, unknown): “Pretorius & Shaw (2004) observe that a vast majority of SMEs rely on internal finance, such as contribution from the owners, family and friends, which is often inadequate for SMEs to survive and grow.”
• Constraints to credit access by new SMEs in South Africa: A supply-side analysis (2011, result): “The results are consistent with the findings of Kitindi et al. (2002), Pretorius and Shaw (2004).”