Which New Small and Medium Enterprises in South Africa Have Access to Bank Credit

By O. Fatoki, A. Odeyemi. 2010

148 citations recorded by the source corpus.

New SMEs are very important to the economy of South Africa. Their failure rate at about 75% is one the highestin the world. Lack of finance is one of the primary reasons for the failure of new SMEs in South Africa. About75% of all applications for bank credit by new SMEs are rejected. This objective of the paper was to investigatethe determinants of credit approval for new SMEs. The survey method and self-administered questionnaires wereused for data collection. 445 respondents took part in the survey. Data was analysed by logistic regression. Theresults indicate that managerial competencies, business information, networking, location, crime, business sizeand incorporation are significant determinants of credit approval.

Subfields: Accounting, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/089f393c3938e12bf4cf84ca0a9ea234eb9eb273