Constraints to credit access by new SMEs in South Africa: A supply-side analysis

The primary objective of this study is to investigate empirically the constraints to credit access by new SMEs from commercial banks and trade creditors. For this purpose an initial 52-item questionnaire was developed after a thorough review of the literature on the business environment. Exploratory factor analysis identified nine factors which included four internal and five external factors. The internal factors were labelled as managerial competencies, collateral, networking and business information. The external factors were labelled the macro-economy, the legal environment, ethical perception, crime and corruption. The instrument used was the self-administered questionnaire. The statistical analyses included descriptive statistics, frequencies, factor analysis T-test and Pearsonʹs correlation. The findings indicated that there are certain factors in the business environment that constrain credit access to new SMEs.