Small and medium enterprises access to bridging finance : the case of kingdom bank africa limited

Abstract

A major problem faced by Small and Medium Enterprises (SMEs) in Botswana is the lack of adequate access to bank finance. This dissertation was carried out to understand the problems faced by SMEs in accessing bank finance in Botswana. The key method was quantitative, supported by some qualitative processes. The case of respondents who had applied for loans at Kingdom Bank Africa Limited was used. A questionnaire and interviews were used to collect data from the respondents. Findings indicated that SMEs encountered problems in accessing bank finance and most of those who managed only got part of the loan applied for. The major challenges encountered by SMEs were information asymmetry and lending criteria. The strategy recommended to improve availability of finance was close collaboration between banks and SMEs. The study will be of interest to banks and financial institutions interested in economic development. SMEs contribute to economic development in various ways: by creating employment, raising living standards and providing innovation. The banks become aware of SMEs frustrations and the need to assist SMEs to address some of these challenges which hamper access to bridging finance.