Abstract:
The study investigated the obstacles to accessing finance by small business
operators in the Buffalo City Metropolitan Municipality. The objectives of the study
were to identify the causes of inaccessibility to finance by small business operators,
to investigate the role of government agencies in supporting small business
operators, to assess the extent to which banks support SMMEs and to suggest
solutions to ease the challenge of inaccessibility of finance by small business
operators. Triangulation research design was used in this study. SMME owners and
managers in the Buffalo City Metropolitan Municipality were the target population.
Simple random sampling technique was used to select respondents. In-depth
interviews were conducted to collect qualitative data. Quantitative data was analysed
using descriptive statistics, Chi-square test and factor analysis. Qualitative data was
analysed using content analysis. Obstacles to accessing finance were identified and
discussed. Lack of collateral security, poor business plans, lack of knowledge and
lack of financial deposit are some of the main factors identified. The banks,
government and government agencies are urged to support the SMME sector for it
remains the economic engine of many African countries. This sector also helps in
reducing the impact of socio-economic challenges like unemployment and poverty.
