Motivations and unique challenges of successful foreign-owned small and medium enterprises in South Africa

Musara, Mazanai; Nieuwenhuizen, Cecile

doi:10.1080/0376835x.2021.1913998

Cited by 1 publication

(1 citation statement)

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“…The financial viability of SMEs determines whether or not they will succeed in the long run (Schwab, Gold, & Reiner, 2019). These small enterprises play a significant role in giving employment to unemployed and in contributing significantly to the economic prosperity of the nation (Musara & Nieuwenhuizen, 2021). SMEs need money for company start-up, improvement, and expansion; however, a scarcity of capital hinders the expansion of SMEs (Akinsola & Ikhide, 2019).…”

Section: Introductionmentioning

confidence: 99%

Financial literacy and SME loan repayments in South Africa during the COVID-19 era

Msomi

Nzama

2022

Investment Management and Financial Innovations

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Small and medium-sized enterprises (SMEs) are the primary victims of the COVID-19 outbreak because they lack adequate resources and are poorly prepared for such interruptions. For SMEs to expand, they need financial assistance such as loans and advances from financial service providers. However, they struggle to repay these loans and advances because they are small in size and do not make large turnovers, and owners lack adequate financial literacy. This study aims to investigate the relationship between financial literacy and loan repayment of SMEs. The study followed a positivist paradigm, and a quantitative approach was employed. A total of 110 self-completed Likert questionnaires were distributed, only 107 were filled correctly and analyzed using SPSS. The results from Pearson’s correlation coefficient showed a strong and significant relationship between financial literacy and SME loan repayments at r = 0.324, P &lt; 0.0005. Regression analysis showed a significant linear relationship between financial literacy and SME loans repayments, F (1.152) = 17.806; P &lt; 0.0005. P &lt; 0.0005 is less than the independent variable (SME loans repayments), B = 0.324, P &lt; 0.0005. The results imply that if SME owners are well-versed in finance, they will be capable of repaying outstanding loans and advances timely.

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Section: Introductionmentioning

confidence: 99%