Internal barriers facing small business owners adopting financial management practices in Makana Municipality, Eastern Cape
- Authors: Tendayi, Elizabeth
- Date: 2023-03-31
- Subjects: Small business South Africa Eastern Cape , Business enterprises Finance South Africa Eastern Cape , Financial management , Contingency theory (Management) , Municipal government South Africa Eastern Cape , Business failures , Success in business
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419484 , vital:71648
- Description: Although small businesses are important in South Africa, they have a high failure rate. About 63 percent of small businesses in South Africa fail in the first 18 months of their inception (Van Staden, 2022; Zhou, 2021; Bruwer, 2020: 148). One of the reasons for the failure of small businesses is the improper and ineffective adoption of proper financial management practices (Zada, Yukun and Zada, 2021: 1074). However, the success of small businesses is highly dependent on the adoption of proper financial management practices (Kapitsinis, 2019; Jindrichovska, 2013; Abuzayed, 2012; Kaya and Alpkan, 2012; Banos-Caballero, Garcia-Teruel and Martinez-Solano, 2010). In the Eastern Cape, most small businesses do not adopt proper financial management practices (Raj, 2012; Van Eeden, Viviers and Venter, 2003:1). Therefore, the study aimed to analyse internal barriers facing small business owners adopting proper financial management practices in Makana Municipality in the Eastern Cape. Eastern Cape. Proper financial management practices are evident where there is transparency, efficiency and accuracy in the achievement of the financial objectives of a business (Cheluget and Morogo, 2017: 215). Financial management practices include cash management practices, accounts receivables management practices, accounts payables management practices, inventory management practices, working capital management practices, investment management or capital budgeting practices, financing or capital structure practices, accounting information systems, financial reporting and analysis practices. The study adopted a qualitative research design and a case study methodology. A non-probability judgment sampling method was used to select a sample of twelve small business owners in Makanda, Makana Municipality. Makanda was a relevant study area because it has a high unemployment rate and poverty, and small businesses may be used as one of the driving forces in the reduction of poverty and unemployment in Makana Municipality (Eastern Cape Socio Economic Consultative Council, 2017: 1; Zemenu and Mohammed, 2014: 2; Alebiosu, 2005: 5). Primary data was collected through semi-structured interviews. Content analysis was used to describe and interpret qualitative data using coding and themes. The findings of the study showed that most small business owners or managers in Makana Municipality adopted cash management practices, working capital management practices, inventory management practices, capital structure (equity capital) practices and financial reporting and analysis. However, it was also found that small business owners or managers in Makana Municipality did not adopt accounts receivables management practices, accounts payables management practices, capital structure (debt capital) practices, accounting information systems and capital budgeting (investment) management practices. These barriers included difficulty in debt collection, cost of debt collection, nature of product or industry, challenges with suppliers or creditors, Covid-19, debt avoidance, improvement of cash flow, negative attitude towards computer systems, waste of resources and difficulty use of computer systems. It is recommended that small businesses may overcome these barriers by implementing proper debt collection procedures, honouring credit payments terms with suppliers or creditors, consulting external accountants on how to balance the use of both debt and equity capital, hiring qualified personnel to acquire training and bring awareness to the use of computer systems. In addition, the government should provide financial education programmes that specifically deal with long-term investments, and small businesses are encouraged to apply for Covid-19 rescue packages or grants through role plates such as Debt Relief Finance Scheme and the Small Enterprise Finance Agency (SEFA). It was concluded that each small business adopts financial management practices differently due to the nature of the business or industry. Also, the adoption of financial management practices is dependent on the exposure of the different barriers within each business. Hence, this study confirms that the contingency theory may be used to explain that the adoption of financial management practices is dependent upon the nature of the business or industry and the different barriers that small businesses face. Theoretically, this study contributed to the existing literature by analysing the barriers faced by small business owners adopting financial management practices in the Eastern Cape. Practically, this study highlighted the internal barriers that small business owners need to overcome to the adoption of financial management practices. , Thesis (MCom) -- Faculty of Commerce, Management, 2023
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The moderating effect of socioeconomic factors on the relationship between financial inclusion and poverty among South African vulnerable households
- Authors: Khalane, Pontso Violet
- Date: 2023-03-31
- Subjects: Financial inclusion , Poverty South Africa , Socioeconomic status South Africa , Financial sector , South Africa. Financial Sector Regulation Act, 2017
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419451 , vital:71645
- Description: Vulnerable households are often excluded from the formal financial sector, subsequently experiencing more poverty. Vulnerable households are those that face higher chances of experiencing higher levels of poverty due to their socioeconomic factors. This study aimed to determine the moderating effect of socioeconomic factors on the relationship between financial inclusion and poverty among South African vulnerable households. Poverty is the involuntary lack of monetary and other resources that can afford households with basic human needs and a decent standard of living above a chosen poverty measure. This study measured poverty using a multidimensional measure that incorporated a household’s deprivation of health, education and a decent standard of living. Financial inclusion refers to a process of incorporating vulnerable households into the formal financial sector by ensuring that they receive timely and adequate access to regulated financial products at an affordable price, regardless of their socioeconomic status. This study measured financial inclusion multidimensionally using access to four basic regulated financial products. Socioeconomic factors included gender, race, first or home language, age, the highest level and many more factors. This study was supported by theoretical framework of the vulnerable group theory of financial inclusion, financial development theory, the credit rationing theory and the public goods theory of financial inclusion. The study adopted a quantitative research design. The study used existing data from the FinMark FinScope 2016 South Africa database, which collected data on households’ demographics and their ownership of financial products. Using a closed-ended questionnaire, FinMark FinScope collected the data across South Africa through a multi-probability sampling technique. The final database used in this study after data cleaning contained a sample of 2759 households. The study used descriptive statistics, Pearson’s product-moment correlation, ANOVA and Multiple regression to investigate the factors of the study. The results of the study found a statistically significant relationship between financial inclusion and vulnerable households. The results also found a statistically significant relationship between poverty and vulnerable households. The results further showed a statistically significant negative relationship between financial inclusion and poverty. Lastly, the study found that only socioeconomic factors such as marital status, age as it relates to children and old people moderating effect on the relationship between financial inclusion and poverty among South African vulnerable households. Subsequently, it was concluded that vulnerable households experienced higher levels of poverty in South Africa, and these vulnerable households were less financially included in South Africa. Additionally, it was found that increasing vulnerable households’ access to all regulated financial products could help decrease their poverty levels. The study made several recommendations, which included inter-alia that formal financial institutions design products that specifically meet the needs of vulnerable households. This study also recommended that banks play a central role in facilitating vulnerable households’ affordability of health in South Africa (e.g., offering affordable healthcare products to vulnerable households). Theoretically, this study contributed to the body of literature using multidimensional financial inclusion and poverty, as well as determining the moderating effect of socioeconomic factors. Practically, this study provided insights to the banks on how to develop their products to meet the needs of vulnerable households, help alleviate poverty, and increase the banks’ market into previously unbanked or underbanked segments of the population of South Africa. , Thesis (MCom) -- Faculty of Commerce, Accounting, 2023
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The influence of financial socialisation agents on financial knowledge, financial self-efficacy and financial behaviour among South African consumers
- Authors: Maswena, Kaelo
- Date: 2022-04-06
- Subjects: Financial literacy South Africa , Finance, Personal South Africa , Budgets, Personal South Africa , Consumer behavior South Africa , Consumers Attitudes , Life skills South Africa , Social learning South Africa , Self-control South Africa , Socialization South Africa , Financial socialisation agents
- Language: English
- Type: Master's thesis , text
- Identifier: http://hdl.handle.net/10962/232421 , vital:49990
- Description: There is a need to promote positive financial behaviour in South Africa. According to the Human Sciences Research Council (2018), South African financial behaviour culture emphasises a financially vulnerable nation in terms of not having enough income for future planning and lacking financial self-control. In its key role in influencing financial behaviour, financial socialisation, which is characterised by interactions with indirect, or purposive financial education and communication of financial norms influencing financial behaviours, attitudes, knowledge, capabilities, and self-efficacy of consumers, is the topic of this study. The purpose of the study was to investigate the influence of financial socialisation agents on financial (actual and self-assessed) knowledge, financial self-efficacy and financial behaviour among South African consumers. Based on Glenn’s (2018) framework, Xiao et al. (2009) socialisation and Moschis et al. (1978) consumer socialisation theory, the financial socialisation theoretical framework is provided for this study. Literature review provided an overview of past studies on the concepts of financial socialisation, financial (actual and self-assessed) knowledge, financial self-efficacy and financial behaviour. Therefore, a positivistic research paradigm was adopted, which used a cross-sectional correlational research methodology. This study analysed data primarily collected by a questionnaire survey of South African social attitudes to financial literacy by the Human Sciences Research Council (2011), using a multi-staged sampling technique in all South African provinces of consumers of 16 years and older. Descriptive statistics showed that most respondents were black African females between the ages of 26 and 35 years. Most held Matric certificates and were in paid employment for 30 hours or more per week. Most respondents considered family to be the most influential financial socialisation agent, followed by friends, then the bank. Actual financial knowledge of respondents, was indicated as relatively high. Results on self-assessed financial knowledge showed that most of the respondents considered their level of financial knowledge to be neutral. Using Pearson product-moment correlations to measure the strength and correlations of relationships, positive significant correlations were found between financial socialisation agents, financial (actual and self-assessed) knowledge and financial self-efficacy, while a negative and insignificant correlation was found between financial socialisation agents and financial behaviour. Multiple regression analysis results testing the hypotheses of the study demonstrated that financial socialisation agents have a significant positive influence on financial (actual and self-assessed) knowledge and financial self-efficacy; a significant influence on financial behaviour was not reported. Self-assessed financial knowledge showed a positive significant influence on financial self-efficacy and actual financial knowledge had an insignificant negative influence on financial self-efficacy. Actual financial knowledge had a significant positive influence on financial behaviour, whereby a positive yet insignificant relationship was found between self-assessed knowledge and financial behaviour. In the end, recommendations for the results indicate that financial educators need to develop a financial education plan that will include other content areas of financial knowledge such as identified by Huston (2010) and Lusardi and Mitchell (2011); the most important recommendation would be to help consumers have an accurate understanding of their own level of financial knowledge and to improve financial self-efficacy in consumers, financial socialisation experiences such as offering encouragement to open a bank account, to save and invest money, and presenting opportunities to practise financial skills, may increase consumers’ self-efficacy and lead to positive financial behaviours. , Thesis (MCom) -- Faculty of Commerce, Management, 2022
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