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ISSN : 2671-4981(Print)
ISSN : 2671-499X(Online)
Journal of Business Economics and Environmental Studies Vol.3 No.2 pp.23-29

* Faculty of Management and Commerce, University of Fort Hare, University of Fort Hare, Alice, P.B. X1314, Eastern Cape, 5700, South Africa

Obstacles to Accessing Finance by Small Business Operators in the Buffalo City Metropolitan Municipality

Tendai Chimucheka*

Received: Feburuary 22, 2013. Revised: August 13, 2013. Accepted: September 04, 2013.


Purpose - The study investigates the obstacles faced bysmall business owners (SBOs) in accessing finance in theBuffalo City Metropolitan Municipality. The study aims to identifythe causes of inaccessibility to finance for SBOs, investigate therole of government agencies in supporting SBOs, assess theextent to which banks support SMMEs, and suggest solutions toease the challenge of inaccessibility of finance.
Research design, data, methodology - We used a triangulationresearch design, wherein SMME owners and managers in theBuffalo City Metropolitan Municipality were the target population.We used simple random sampling techniques to select respondents,and conducted in-depth interviews to collect qualitativedata.
Results - We analyzed quantitative data using descriptive statistics,Chi-square tests, and factor analysis. The qualitative datawas analyzed using content analysis. The study identifies anddiscusses the obstacles in accessing finance; the main amongwhich are the lack of collateral security, poor business plans,lack of knowledge, and lack of financial deposit.
Conclusions - We urge the banks, government, and governmentagencies to support the SMME sector, for it remains theeconomic engine of many African countries and helps in reducingthe impact of socio-economic challenges, like unemploymentand poverty.

JEL Classifications : L60, L67.


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