Credit risk management in development finance institutions and SMME sustainability
- Authors: Derrocks, Velda Charmaine
- Date: 2017
- Subjects: Credit -- Management Business enterprises -- Finance , Small business -- Finance
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/14862 , vital:27884
- Description: Small, Medium and Micro Enterprises (SMMEs) make a significant contribution to the South African Economy. Regardless of size, these businesses have the ability to create employment, make a generous contribution to tax collections, uplift communities and serve as a beacon of hope for those trapped in the cycle of poverty and unemployment. However, SMMEs lack access to much-needed financial resources that are critical for their growth. Development Finance Institutions (DFIs) aim to bridge the gap between the SMME’s financial needs and the development of the respective SMME businesses, by providing funding to entrepreneurs with potentially viable businesses and ideas. Debt funding to these SMMEs are based on sound commercial lending principles that take various non-quantitative variables into account. The sustainability of SMMEs is a primary concern to all participants in the economy, as it is known that SMME failure rates are high Therefore, the primary objective of this study was to investigate the impact that the credit risk management practices of DFIs have on the sustainability of SMMEs, by examining a case study of a typical DFI. An electronic questionnaire survey was considered as an appropriate measurement method for this study. The targeted population of the study included SMMEs in the Eastern Cape that are Trust for Urban Housing (TUHF) clients and 23 SMMEs were identified as part of the study sampling frame. A total number of 14 questionnaires were returned out of the 23 targeted SMMEs - giving a response rate of 61%. The quantitative data was processed using the STATISTICA program, leading to appropriate descriptive statistical analyses. In order to better understand the impact of credit risk management practices on the sustainability of SMMEs, a hypothesis was formulated and linear regression analysis was used to establish the statistical significance of certain credit risk principles and sustainability characteristics. The results of the empirical study revealed that credit risk management practises do impact on the sustainability of SMMEs. Further, by testing the hypothesis, it was also revealed that certain sustainability variables are regarded as more important than others.
- Full Text:
- Date Issued: 2017
- Authors: Derrocks, Velda Charmaine
- Date: 2017
- Subjects: Credit -- Management Business enterprises -- Finance , Small business -- Finance
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/14862 , vital:27884
- Description: Small, Medium and Micro Enterprises (SMMEs) make a significant contribution to the South African Economy. Regardless of size, these businesses have the ability to create employment, make a generous contribution to tax collections, uplift communities and serve as a beacon of hope for those trapped in the cycle of poverty and unemployment. However, SMMEs lack access to much-needed financial resources that are critical for their growth. Development Finance Institutions (DFIs) aim to bridge the gap between the SMME’s financial needs and the development of the respective SMME businesses, by providing funding to entrepreneurs with potentially viable businesses and ideas. Debt funding to these SMMEs are based on sound commercial lending principles that take various non-quantitative variables into account. The sustainability of SMMEs is a primary concern to all participants in the economy, as it is known that SMME failure rates are high Therefore, the primary objective of this study was to investigate the impact that the credit risk management practices of DFIs have on the sustainability of SMMEs, by examining a case study of a typical DFI. An electronic questionnaire survey was considered as an appropriate measurement method for this study. The targeted population of the study included SMMEs in the Eastern Cape that are Trust for Urban Housing (TUHF) clients and 23 SMMEs were identified as part of the study sampling frame. A total number of 14 questionnaires were returned out of the 23 targeted SMMEs - giving a response rate of 61%. The quantitative data was processed using the STATISTICA program, leading to appropriate descriptive statistical analyses. In order to better understand the impact of credit risk management practices on the sustainability of SMMEs, a hypothesis was formulated and linear regression analysis was used to establish the statistical significance of certain credit risk principles and sustainability characteristics. The results of the empirical study revealed that credit risk management practises do impact on the sustainability of SMMEs. Further, by testing the hypothesis, it was also revealed that certain sustainability variables are regarded as more important than others.
- Full Text:
- Date Issued: 2017
Risk management
- Authors: Derrocks, Velda Charmaine
- Date: 2010
- Subjects: Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:8633 , http://hdl.handle.net/10948/1480 , Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Description: The objective of the study is to establish a perspective of risk management by doing an assessment of current risk management practices, especially in the aftermath of the 2008/2009 global financial crisis. Risk management, as a component of corporate governance, was analysed by addressing the following: - The nature of value-creating assets in business; - The primary challenges for risk management over the next three years; - The changing approaches towards risk management; - The role of legislation and external stakeholders; - The role of risk management in strategic planning; - The cost of risk management; and - The benefits of improved risk management capabilities. A survey was conducted in the form of a questionnaire in order to obtain primary information from business owners on the current role of risk management in their organisations as well as their view on the role of risk management going forward. Businesses operating in the Port Elizabeth and surrounding area with an existing relationship with Absa Business Banking Services participated in the study. Quantitative techniques were used to analyse the data that were obtained from the sample group. The study revealed that the role of risk management in enterprises is evolving into an integrated, enterprise wide risk management function that can be utilised as a source of competitive advantage, from both a funding perspective for Banks and a business perspective for business owners. Capitalising on risk management as a competitive advantage will ultimately lead to long term sustainability and profitability of South African business enterprises and the South African Banking system.
- Full Text:
- Date Issued: 2010
- Authors: Derrocks, Velda Charmaine
- Date: 2010
- Subjects: Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:8633 , http://hdl.handle.net/10948/1480 , Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Description: The objective of the study is to establish a perspective of risk management by doing an assessment of current risk management practices, especially in the aftermath of the 2008/2009 global financial crisis. Risk management, as a component of corporate governance, was analysed by addressing the following: - The nature of value-creating assets in business; - The primary challenges for risk management over the next three years; - The changing approaches towards risk management; - The role of legislation and external stakeholders; - The role of risk management in strategic planning; - The cost of risk management; and - The benefits of improved risk management capabilities. A survey was conducted in the form of a questionnaire in order to obtain primary information from business owners on the current role of risk management in their organisations as well as their view on the role of risk management going forward. Businesses operating in the Port Elizabeth and surrounding area with an existing relationship with Absa Business Banking Services participated in the study. Quantitative techniques were used to analyse the data that were obtained from the sample group. The study revealed that the role of risk management in enterprises is evolving into an integrated, enterprise wide risk management function that can be utilised as a source of competitive advantage, from both a funding perspective for Banks and a business perspective for business owners. Capitalising on risk management as a competitive advantage will ultimately lead to long term sustainability and profitability of South African business enterprises and the South African Banking system.
- Full Text:
- Date Issued: 2010
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