Facilitating banking finance access for BBBEE firms in the Southern Cape area
- Authors: Kroukamp, Thelma
- Date: 2009
- Subjects: Small business -- South Africa -- Finance , Business enterprises, Black -- South Africa , Business enterprises -- Economic aspects -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8706 , http://hdl.handle.net/10948/996 , Small business -- South Africa -- Finance , Business enterprises, Black -- South Africa , Business enterprises -- Economic aspects -- South Africa
- Description: Studies have shown that BBBEE parties are unsuccessful in raising banking finance due to a number of reasons. The objective of the enactment of the Broad Based Black Economic Empowerment (BBBEE) Act is primarily to promote the participation of black people in the economy. The measurement of BBBEE is determined by the codes of good practice for Qualifying Small Enterprises (QSE), which consists of seven elements namely: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. Enterprises with annual turnover ranging from R5 million and R35 million qualify as QSE. These elements measure the level of BBBEE status. The enactment of the National Credit Act replaced the Usury Act, 1968 and the Credit Agreements Act, 1980. The objective of the act is to promote accessibility to the credit market and to prevent the over-indebtedness of consumers. The Act is applicable to natural persons with contractual capacity and juristic persons with monetary assets or annual turnover of less than R1 million. This study aims to establish the facilitation of access to banking finance for BBBEE SME’S within the George and Mossel Bay area as these towns form part of the Garden Route Business Banking Division of Nedbank. The effect of the BBBEE and NCA on the accessing of banking finance was studied and analysed. Credit applications are subject to stringent credit scoring systems to rate applicants, monitor performance and manage accounts. The Basel rating which measures the minimum level of capital a bank should hold to protect investors determines the interest rate charged for loans. These ratings affect the accessibility of banking finance. A framework for bank and SME relationship building shows the relationships between: • The accounts manager’s role in relationship management; • Branch staff role in relationship management; • Corporate policies as part of relationship management. A survey was conducted in the form of a questionnaire in order to obtain primary information from two sample groups, banking officials and BBBEE clients to establish the relationship between the two sample groups. Quantitative techniques were used and the data obtained from the two sample groups were analysed. The study revealed that the by establishment of relationships between BBBEE clients and banking officials would facilitate access to banking.
- Full Text:
- Date Issued: 2009
- Authors: Kroukamp, Thelma
- Date: 2009
- Subjects: Small business -- South Africa -- Finance , Business enterprises, Black -- South Africa , Business enterprises -- Economic aspects -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8706 , http://hdl.handle.net/10948/996 , Small business -- South Africa -- Finance , Business enterprises, Black -- South Africa , Business enterprises -- Economic aspects -- South Africa
- Description: Studies have shown that BBBEE parties are unsuccessful in raising banking finance due to a number of reasons. The objective of the enactment of the Broad Based Black Economic Empowerment (BBBEE) Act is primarily to promote the participation of black people in the economy. The measurement of BBBEE is determined by the codes of good practice for Qualifying Small Enterprises (QSE), which consists of seven elements namely: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. Enterprises with annual turnover ranging from R5 million and R35 million qualify as QSE. These elements measure the level of BBBEE status. The enactment of the National Credit Act replaced the Usury Act, 1968 and the Credit Agreements Act, 1980. The objective of the act is to promote accessibility to the credit market and to prevent the over-indebtedness of consumers. The Act is applicable to natural persons with contractual capacity and juristic persons with monetary assets or annual turnover of less than R1 million. This study aims to establish the facilitation of access to banking finance for BBBEE SME’S within the George and Mossel Bay area as these towns form part of the Garden Route Business Banking Division of Nedbank. The effect of the BBBEE and NCA on the accessing of banking finance was studied and analysed. Credit applications are subject to stringent credit scoring systems to rate applicants, monitor performance and manage accounts. The Basel rating which measures the minimum level of capital a bank should hold to protect investors determines the interest rate charged for loans. These ratings affect the accessibility of banking finance. A framework for bank and SME relationship building shows the relationships between: • The accounts manager’s role in relationship management; • Branch staff role in relationship management; • Corporate policies as part of relationship management. A survey was conducted in the form of a questionnaire in order to obtain primary information from two sample groups, banking officials and BBBEE clients to establish the relationship between the two sample groups. Quantitative techniques were used and the data obtained from the two sample groups were analysed. The study revealed that the by establishment of relationships between BBBEE clients and banking officials would facilitate access to banking.
- Full Text:
- Date Issued: 2009
The role of bank finance in small firm growth : a case study
- Authors: Musengi, Sandra
- Date: 2003
- Subjects: Banks and banking -- South Africa , Finance -- South Africa , Small business -- South Africa -- Finance , Small business -- South Africa -- Growth -- Case studies , Entrepreneurship -- South Africa , New business enterprises -- South Africa , Bank loans -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1176 , http://hdl.handle.net/10962/d1002793 , Banks and banking -- South Africa , Finance -- South Africa , Small business -- South Africa -- Finance , Small business -- South Africa -- Growth -- Case studies , Entrepreneurship -- South Africa , New business enterprises -- South Africa , Bank loans -- South Africa
- Description: The debate concerning small firm access to finance continues. The proliferation of research of the issue underlines the importance attached in promoting a strong entrepreneurial culture within a country. Small firms are significant to economic growth if they are growing. Central to this significance is ascertaining the role of finance and in particular bank finance in accelerating small growth potential. The case study, through its ontological, epistemological and methodological position, draws on a document review and interview material from small firm owners and key informants to explore the role of bank finance in small firm growth. Case study evidence reveals that small firm owners do not intend to finance firm growth with bank finance but prefer to finance growth with internally generated funds. The owners indicate that non-financial and behavioural factors, such as, maintaining decision-making control, experience accessing bank finance, the perception of the banking relationship and growth aspirations of owners may be more important in dertermining the finance structure for firm growth. From the bank's perspective, findings suggest that risk assessment, financial viability of the enterprise and provision of collateral are more important in the lending decisions; findings supported by an analysis of selected documents. The small sample of small firm owners, bank representatives, experts and documents makes it difficult to generalize the findings. However, the findings are significant because exploring the issue from different perspectives presents invaluable insights, which can be investigated further to assist small firm owners, to develop finance products geared for small firm operations, and in the development of the knowledge base on finance-related issues in the South African context.
- Full Text:
- Date Issued: 2003
- Authors: Musengi, Sandra
- Date: 2003
- Subjects: Banks and banking -- South Africa , Finance -- South Africa , Small business -- South Africa -- Finance , Small business -- South Africa -- Growth -- Case studies , Entrepreneurship -- South Africa , New business enterprises -- South Africa , Bank loans -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1176 , http://hdl.handle.net/10962/d1002793 , Banks and banking -- South Africa , Finance -- South Africa , Small business -- South Africa -- Finance , Small business -- South Africa -- Growth -- Case studies , Entrepreneurship -- South Africa , New business enterprises -- South Africa , Bank loans -- South Africa
- Description: The debate concerning small firm access to finance continues. The proliferation of research of the issue underlines the importance attached in promoting a strong entrepreneurial culture within a country. Small firms are significant to economic growth if they are growing. Central to this significance is ascertaining the role of finance and in particular bank finance in accelerating small growth potential. The case study, through its ontological, epistemological and methodological position, draws on a document review and interview material from small firm owners and key informants to explore the role of bank finance in small firm growth. Case study evidence reveals that small firm owners do not intend to finance firm growth with bank finance but prefer to finance growth with internally generated funds. The owners indicate that non-financial and behavioural factors, such as, maintaining decision-making control, experience accessing bank finance, the perception of the banking relationship and growth aspirations of owners may be more important in dertermining the finance structure for firm growth. From the bank's perspective, findings suggest that risk assessment, financial viability of the enterprise and provision of collateral are more important in the lending decisions; findings supported by an analysis of selected documents. The small sample of small firm owners, bank representatives, experts and documents makes it difficult to generalize the findings. However, the findings are significant because exploring the issue from different perspectives presents invaluable insights, which can be investigated further to assist small firm owners, to develop finance products geared for small firm operations, and in the development of the knowledge base on finance-related issues in the South African context.
- Full Text:
- Date Issued: 2003
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