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Financing SMEs in Botswana: Factors influencing access to credit

Author

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  • Goitseone Khanie

    (Botswana Institute for Development Policy Analysis)

Abstract

This study examines factors influencing access to credit by SMEs in Botswana. Using the 2010 World Bank Enterprise Survey, and employing logit model for analysis, we find that access to credit is influenced by gender, citizenship and experience of the entrepreneur; as well as firm-size, sector of business, sales and land ownership. Therefore, public policy must pay attention to the diversities of SMEs’ socio-economic characteristics as well as the business environment in which they operate when implementing finance assistance programmes. Measures to develop SMEs must be carefully focused, aiming at providing incentives for financial institutions to play an active role in SME financing. Government must formulate policies that will make finance institutions relax their requirements and lending procedures which tend to discourage borrowing. Similarly, public policy must be focused on strengthening the business acumen of SMEs through trainings and workshops, such that they are perceived attractive to financiers.

Suggested Citation

  • Goitseone Khanie, 2018. "Financing SMEs in Botswana: Factors influencing access to credit," Working Papers 50, Botswana Institute for Development Policy Analysis.
    • Handle: RePEc:bid:wpaper:50
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    File URL: http://knowledge.bidpa.bw:8080/xmlui/handle/123456789/130
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    Cited by:

    1. Godfrey Tambudzayi Musabayana & Emmanuel Mutambara & Tony Ngwenya, 2022. "An empirical assessment of how the government policies influenced the performance of the SMEs in Zimbabwe," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-21, December.

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