Kriteria vir die Finansiering van Kleinnyweraars

Abstract

The aim of the study is to develop criteria for the financing of small industrialists. Existing criteria and methods of evaluation discriminate against owners of small enterprises who do not have adequate securities and collateral available and do not identify potentially successful owners of small businesses, only potentially successful enterprises. The criteria have to be adapted to empower potentially successful small industrialists and to ensure economic development. Small industrialists and the criteria used by financiers of small enterprises were examined to determine what contributes to the success of small enterprises and how these enterprises evaluated by criteria for financing. Seventeen success factors for small industrialists were identified through the research process. The success factors were divided according to personal characteristics and functional management skills. Seven success factors relating to personal characteristics were identified. These are perseverance, commitment to and involvement in the enterprise, willingness to take risks, sound human relations, creativity and innovation, and a positive attitude and approach. Ten success factors which relate to functional management skills were identified. These are planning of the enterprise, knowledge and skills relating to the enterprise, the use of experts, client service, knowledge of competitors, market orientation, concern for high quality of work, bookkeeping for own benefit, financial insight and financial management. The criteria for the financing of small enterprises include nine of the ten functional success factors identified by the research as important. Bookkeeping for own benefit is the only functional management skill not evaluated by any of the financiers. The only success factor related to personal characteristics used by financiers as a criterion is commitment to the enterprise. A few financiers used creativity and innovation and involvement in the enterprise as criteria. The success factors of perseverance, willingness to take risks, sound human relations, ·a positive attitude and approach and bookkeeping for own benefit are not used as criteria for the financing of small enterprises. Five of the seventeen success factors are not evaluated by the criteria of financiers. Four success factors, namely creativity and innovation, involvement in the enterprise, concern for high quality of work and client service are evaluated by only a few financiers. Nine of the seventeen success factors are therefore not evaluated by financiers or are evaluated insufficiently. Criteria for financing have to be adapted to contribute to the development of entrepreneurial small enterprises and should not focus on the financing of enterprises which comply with basic management skills only. Entrepreneurship, and not management skills, ensures actual economic development.