Small business failures in Botswana with special reference to the financial assistance policy (FAP) funded projects

Abstract

The study was conducted in order to establish the major causes for small business failures in Botswana. The study was carried out specifically using businesses which were financed by the Financial Assistance Policy (F AP). Employment generation and economic diversification objectives of the policy were emphasized in this study. The primary data was collected through a questionnaire and unstructured interviews. The questionnaires were distributed to entrepreneurs operating in the 4 areas being Gaborone, Pilane, Ramotswa and Molepolole. The original intention was to distribute 40 questionnaires but finally only 35 were distributed because some entrepreneurs declined to accept the questionnaires. Literature was reviewed using different text documents, policies and programmes as well as edited books and relevant studies. The data was analyzed using tables and descriptive information to explain the results. Constraints were identified and they accounted for most or all the failures of F AP assisted projects. The findings showed that in general, F AP failed to achieve its objectives. It was also found that many small businesses collapsed immediately after exhausting F AP funds. The conclusion made is that The Small Business Sector is faced with many problems and some of these can be identified to the owners/managers of the businesses. If the Government does not extend the support for small business beyond just financing, it will be difficult for this sector to succeed. Government needs to do a lot in terms of training and changing the mindset of citizens before this sector can succeed.