Formal financial institutions’ financing of women-owned small and medium enterprises in South Africa: a supply-side perspective

Francis Tangwo Asah and Progress Hove-Sibanda

Qualitative Research in Financial Markets, 2024, vol. 17, issue 1, 210-228

Abstract: Purpose - Although women-owned small and medium enterprises (SMEs) represent only 21.1% of all SMEs in South Africa, they play a fundamental role in the SME sector in terms of job creation, employment and poverty alleviation that is critical for economic growth. This study aims to explore (FFIs) financing of women-owned SMEs in South Africa from a credit provider perspective (supply-side). Design/methodology/approach - A qualitative research approach positioned in the interpretivistic research paradigm was used to accomplish this study objectives. The five-step process of content analysis proposed by Terre Blanche, Durrheim and Kelly was used to analyse the qualitative data collected from the 16 participants via semi-structured in-depth interviews. Findings - The findings reveal that FFIs are willing to finance women-owned businesses provided they can contribute a reasonable percentage of the equity capital and a first-class collateral. Lack of equity, business experiences and first-class collateral are the most serious challenges faced by FFIs when considering lending to women-owned SMEs. Originality/value - This study investigated the financing of women-owned SMEs in South Africa from a supply-side perspective, compared to other studies that used quantitative methodology. This study findings provide insights into how FFIs perceive financing women-owned SMEs, women-owned SMEs credit approval rate, the factors that influence the willingness of FFIs to provide credit to women-owned SMEs and the challenges experienced by FFIs in financing women-owned SMEs.

Keywords: Women; SMEs; Financing; Formal financial institution; Supply-side (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-02-2023-0031

DOI: 10.1108/QRFM-02-2023-0031

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