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

2010 International Journal of Business and Management  
New SMEs are very important to the economy of South Africa. Their failure rate at about 75% is one the highest in the world. Lack of finance is one of the primary reasons for the failure of new SMEs in South Africa. About 75% of all applications for bank credit by new SMEs are rejected. This objective of the paper was to investigate the determinants of credit approval for new SMEs. The survey method and self-administered questionnaires were used for data collection. 445 respondents took part in
more » ... ndents took part in the survey. Data was analysed by logistic regression. The results indicate that managerial competencies, business information, networking, location, crime, business size and incorporation are significant determinants of credit approval.
doi:10.5539/ijbm.v5n10p128 fatcat:3nplbg5embaafco3kjsa4w62li