Finance availability for small and medium enterprises in the tourism sector in Botswana : the case of Gaborone and its environs

Abstract

The aim of this study was to investigate the availability for finance on Small and Medium Enterprises (SMEs) in the tourism sector. Specific objectives of the study were to examine the problems related to financing of SMEs in Botswana; to examine gender in the ownership of SMEs in the tourism factor especially in guest houses and lodges; and to formulate recommendations to financial institutions and SMEs in the tourism sector. Data was collected using the survey approach. Guest house and lodge owners from Gaborone, Molepolole, Mochudi and Ramotswa were used as respondents in the survey. They were requested to complete a questionnaire on their views of finance availability for SMEs in the tourism sector. A statistical package, Statistics Package for Social Sciences version 17.0, was used to generate frequency tables and histograms to facilitate the data analysis and discussion of findings. The findings of the study revealed that SME financing is more readily available from government funded institutions like the Citizen Entrepreneur Development Agency (CEDA) than from institutions like commercial banks which require collateral, among other things, in order for an entrepreneur to source finance. This is a problem for SMEs who need funds from such institutions. The findings also revealed that many Batswana are involved in the tourism industry although the larger group consists of male dominated SMEs. The majority of SME owners who participated in the study are male who are also of prime age, above 36 years, with women having a less active participation in the tourism sector. The youth and women are relatively few. The majority of SME owners who participated in this study felt the government must do more in terms of availing non-financial assistance to them. They cited advice on business plans and financial skills training as some of the efforts the government can assist with. The author concluded by providing further recommendations.