The relationship between financing criteria and the success factors of entrepreneurs in small and medium enterprises

Cecile Nieuwenhuizen and Jaap Kroon

Development Southern Africa, 2003, vol. 20, issue 1, 129-142

Abstract: Existing criteria for, and methods of, evaluation discriminate against owners of small and medium enterprises (SMEs) who do not have adequate securities and collateral available. These criteria and methods do not identify potentially successful owners of SMEs, only potentially successful enterprises. Financing criteria have to be adapted to empower potentially successful SMEs and to ensure economic development. The aim of the study is to develop relevant criteria for the financing of SMEs. The success factors of SMEs, as well as the criteria used by financiers of SMEs, were examined. This made it possible to determine what contributes to the success of SMEs and how these enterprises are being evaluated by financial institutions. Research articles were used for a literature review of the success factors identified. The results were used to formulate additional and alternative recommendations for criteria that can be used by financial institutions for evaluating financial applications.

Date: 2003
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DOI: 10.1080/0376835032000065525

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