Financing Small and Medium Enterprises in the Republic of South Africa
Numerous studies worldwide have highlighted the important contribution made by small and medium-sized enterprises (SMEs) to employment, income and economic growth. In a study of 76 developed and developing economies, Ayyagari and others (2007) foun...
| Main Authors: | , , , , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2011/01/16465228/financing-small-medium-enterprises-republic-south-africa http://hdl.handle.net/10986/12687 |
| Summary: | Numerous studies worldwide have
highlighted the important contribution made by small and
medium-sized enterprises (SMEs) to employment, income and
economic growth. In a study of 76 developed and developing
economies, Ayyagari and others (2007) found that SMEs
account for more than 60 percent of total manufacturing
employment and that SMEs contributed significant proportions
of Gross Domestic Product (GDP). SME growth requires
external financing, but constraints to accessing credit,
consistently rated as some of the greatest barriers to the
operation and growth of firms, affect SMEs more severely
than large firms (Beck and Demirguc-Kunt 2006; Beck and
others 2006). The purposes of this report are to: a) analyze
the availability of bank finance to SMEs in South Africa and
how availability might be enhanced in the context of the
economic downturn; and b) offer concrete policy
recommendations on how to lessen obstacles to bank SME
financing and reduce the negative effects of the economic
downturn (or of a similar downturn in future) on access to
finance. The report is structured in 5 sections: section two
provides a short overview of existing studies and data on
SME finance in South Africa. Section three presents the main
results of the surveys. Section four provides policy
considerations. Section five concludes. |
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