Abstract
Small and medium construction enterprises (SMEs) are important vehicle to drive the economic growth globally. However, this sector have been stifled to participate fully in the main stream economy, due to lack of finance. There is paucity of research to determine the predictors of business overdraft accessibility from banks in South Africa. The data was obtained using questionnaire survey. 179 SMEs contractors responded, from conveniently sampled respondents in Gauteng province in South Africa. The data was analysed using Statistical Package for the Social Sciences version 22. The study found that the dependant variable, business overdraft, was only predicted with the business location. However, the other independent variables modelled with business overdraft i.e. gender, age group, current position, type of organization ownership, tax number and collateral were not predictors of the business overdraft accessibility. The finding suggests that banks should not force clients to submit collateral before awarding credit to the SMEs. The model that was tested attained the Hosmer and Lemeshow Test goodness of fit. Hence the results were credible. However, a further study is proposed for the entire country. As the researchers acknowledge location of the study as a limitation. This will enable the researchers to generalize the findings.
This is a preview of subscription content, log in via an institution to check access.
References
Aduda J, Magutu OP, Wangu GM (2012) The relationship between credit scoring practices by commercial banks and access to credit by small and medium enterprises in Kenya. Int J Humanit Soc Sci 2(9):203–213
Agumba NJ (2006) Evaluating the use of project management techniques in infrastructure delivery by South African small and medium sized contractors. Unpublished masters dissertation. Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Agumba JN, Adegoke IO, Otieno FAO (2005) Evaluating project management techniques in small and medium enterprises delivering infrastructure in South Africa construction industry. In: Proceedings of 3rd postgraduate conference, construction industry development, Eskom Convention Center, Midrand, 10–12th October
Alhassan F, Sakara A (2014) Socio-economic determinants of small and medium enterprises’ (SMEs) access to credit from the barclays bank in Tamale-Ghana, Int J Humanit Soc Sci Stud I(II):26–36
Angela and Motsa Associates (2004) SMME finance sector background paper: a review of key documents on SMME finance 1994–2004. Fin Mark Trust, Johannesburg
Beck T, Aslı, D-K, Maria SMP (2008) Bank financing for SMEs around the world: drivers, obstacles, business models, and lending practices, policy research working paper 4785. World Bank, Washington, DC
Bondinuba FW (2012) Exploring the challenges and barriers in accessing financial facilities by small and medium construction firms in Ghana. Civ Environ Res 2(6):25–35
Chauke PK, Motlhatlhana ML, Pfumayaramba TK, Anim FDK (2013) Factors influencing access to credit: a case study of smallholder farmers in the Capricorn district of South Africa. Afr J Agric Res 8(7):582–585
Construction Industry Development Board (2008) Construction health and safety in South Africa, Status and recommendations. Pretoria, South Africa
Creswell JW (1994) Research design, qualitative and quantitative approaches. Sage, London
Department of Public Works (1999) White paper on creating an enabling environment for reconstruction growth and development in the construction industry, Government Printers, Republic of South Africa. http://www.info.gov.za/whitepaper/1999/environment.htm. Last accessed on 01 Feb 2015
Directors briefing (n.d.) Overdrafts and bank loans. Available from http://www.icaew.com/~/media/corporate/files/library/collections/online%20resources/briefings/directors%20briefings/fi1overd.ashx. Accessed on 05 Aug 2016
Dzadze P, Osei Mensah J, Aidoo R, Nurah GK (2012) Factors determining access to formal credit in Ghana: a case study of smallholder farmers in the Abura-AsebuKwamankese district of central region of Ghana. J Dev Agric Econ 4(14):416–423
Etonihu KI, Rahman SA, Usman S (2013) Determinants of access to agricultural credit among crop farmers in a farming community of Nasarawa State, Nigeria. J Dev Agric Econ 5(5):192–196
Fatoki O (2014) Factors influencing the financing of business start-ups by commercial banks in South Africa. Mediterranean J Soc Sci 5(20):94–100
Fatoki O, Odeyemi A (2010) Which new small and medium enterprises in South Africa have access to bank credit? Int J Bus Manag 5(10):128–136
First National Bank (n.d.) Business overdraft. Available from https://www.fnb.co.za/business-banking/accounts/overdraft.html. Accessed on 05 Aug 2016
Grimsholm E, Poblete L (2011) Internal and external factors hampering SME growth-a qualitative case study of SMEs in Thailand. Unpublished masters thesis, Gotland University
Kayanula D, Quartey P (2000) The policy environment for promoting small and medium-sized enterprises in Ghana and Malawi. Finance and Development Research Programme, working paper series, paper no. 15. IDPM, University of Manchester
Kimutai CJ, Ambrose J (2013) Factors influencing credit rationing by commercial banks in Kenya. Int J Humanit Soc Sci 3(20):244–252
Kira RA, He Z (2012) The Impact of firm characteristics in access of financing by small and medium-sized enterprises in Tanzania. Inter J Bus Manag 7(24):108–119
Mandell L (1994) The credit card industry: a history. Twayne Publishers, Boston
Martin l (2010) Challenges faced by South African emerging contractors—review and update. In: Proceedings of the construction, building and real estate research conference of royal institute of chartered surveyors, Dauphine Universite, Paris, France, 2nd–3rd September
Musamali MM, Tarus KD (2013) Does firm profile influence financial access among small and medium enterprises in Kenya? Asian Econ Financ Rev 3(6):714–723
National Small Business Act (2004) Number 29 of 2004 Republic of South Africa. Available from: http://www.info.gov.za/view/DownloadFileAction?id=67967. Last accessed on 18 Apr 2016
Nkuah KJ, Tanyeh PJ, Gaeten K (2013) Financing small and medium enterprises (SMEs) in Ghana: challenges and determinants in accessing bank credit. Int J Res Soc Sci 2(3):12–25
Ololade RA, Olagunju FI (2013) Determinants of access to credit among rural farmers in Oyo State, Nigeria. Glob J Sci Front Res Agric Vet Sci 13(2,1):17–22
Pallant J (2013) SPSS, survival manual: a step-by-step guide to data analysis using IBM, SPSS, 5th edn. Allen & Unwin, Sydney, Melbourne, Auckland, London
Standard Bank South Africa (n.d., a) Available from https://www.standardbank.co.za/secure/applications/wcf/overdraft_form.html. Accessed on 05 Aug 2016
Standard Bank South Africa (n.d., b) Business overdraft. Available from http://www.standardbank.co.za/standardbank/Business/Loans-and-finance/Business-Overdraft. Accessed on 05 Aug 2016
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer Nature Singapore Pte Ltd.
About this paper
Cite this paper
Balogun, O.A., Agumba, N.J., Ansary, N. (2018). Determinants of Business Overdraft Accessibility Within Small and Medium-Sized Enterprises in the South African Construction Industry: A Case of Gauteng Province. In: Chau, K., Chan, I., Lu, W., Webster, C. (eds) Proceedings of the 21st International Symposium on Advancement of Construction Management and Real Estate. Springer, Singapore. https://doi.org/10.1007/978-981-10-6190-5_56
Download citation
DOI: https://doi.org/10.1007/978-981-10-6190-5_56
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-10-6189-9
Online ISBN: 978-981-10-6190-5
eBook Packages: Business and ManagementBusiness and Management (R0)