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2012 (Vol. 4, Issue: 1)
Article Information:

Access to Finance in the SME Sector: A South African Perspective

Musara Mazanai and Olawale Fatoki
Corresponding Author:  Musara Mazanai 

Key words:  Access to finance, credit rationing, SMEs, South Africa, , ,
Vol. 4 , (1): 58-67
Submitted Accepted Published
2011 September, 14 2011 October, 24 2012 February, 20

The study provides a comprehensive discussion on access to finance by the Small and Medium Enterprises (SME) sector in South Africa. Access to finance has been noted as one of the major challenges impeding the survival and growth of the SME sector in South Africa. The problems of access to finance, gaps and the reasons for the gaps in SME financing in South Africa are discussed. Gaps in SME financing were discussed in relation Stiglitz and Weiss (1981) credit rationing theory which advocates that agency problems and asymmetric information are the main reasons for the credit rationing behaviours of credit providers to SMEs. This paper is a review to identify gaps in literature regarding the financing of SMEs in South Africa. It is revealed that access to finance by SMEs is still a major challenge impeding the realisation of the full potential of SMEs as engines of poverty alleviation, employment creation and economic growth at large. Therefore it is recommended that policy recommendations aimed at solving access to finance challenges must be empirically tested on a regular basis and progress in that regard must be constantly monitored and revised to eradicate the problem.
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  Cite this Reference:
Musara Mazanai and Olawale Fatoki, 2012. Access to Finance in the SME Sector: A South African Perspective.  Asian Journal of Business Management, 4(1): 58-67.
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ISSN (Online):  2041-8752
ISSN (Print):   2041-8744
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