Bridging the gap between financial and non-financial business development services for enhancing SME success : a Namibian case study

Gustavo-Nahum, Claudette (2013-03)

Thesis (MDF)--Stellenbosch University, 2013.

Thesis

ENGLISH ABSTRACT: There is general consensus that small and medium sized enterprises (SMEs) play a formidable role in contributing to employment creation, domestic and export earnings, and poverty reduction (OECD, 2004). They are therefore extremely important to the development of nations (particularly developing countries), as they constitute the bulk of economic contributors outside of agriculture (OECD, 2004). However, SMEs face a number of challenges as they work to realise these important contributions. Aside from the financial constraints that often mar the success rate of SMEs, several non-financial factors hinder their development and their ability to contribute to national development. Non-financial issues include access to markets, technology and training; sectoral support, business networking, and access to information and advice (Thomas, 2003). Based on the important role that SMEs play in developing economies, however, it is crucial that they receive the support needed to help them to succeed, through the provision of business development services. While the financial aspect of SME success is important, their non-financial needs should also be addressed to ensure the holistic survival of SMEs (European Commission, 2009). The role and development of adequate non-financial business development services to either complement financial resources, or to mitigate the lack thereof, is therefore imperative (International Finance Corporation, 2010). This research report explores the gap that currently exists between the financial and non-financial business development services that exist for SMEs in Namibia; and analyses how non-financial services can be enhanced and marketed, to complement financial services that currently exist, and of which SMEs are aware. The report assesses how SMEs can become better aware of, and best utilise business development services to promote their growth objectives. A quantitative and qualitative analysis of SMEs and Business Development Services (BDS) providers in Namibia is conducted, using a survey and questionnaire, and drawing on a literature review. Finally, the report provides a set of recommendations, based on international best practices, of business development instruments needed to transform the SME sector to promote long term sustainability. This research report finds that SMEs need to become better aware and make use of non-financial BDS support to realize the growth objectives of their businesses. The researcher recommends that government and NGOs streamline their support of BDS providers, to being more facilitative and less prescriptive. Additionally, it is recommended that incubation centres adopt best practices in terms of incubator creation, process and performance assessment; that sectoral support and industrial clusters for technical-know-how is promoted; and that BDS suppliers provide context-specific training in order to enhance the effects of training provided. Further recommendations include the promotion of BDS to the general public to increase awareness of the importance of these services; the harnessing of BDS in Namibia’s financial institutions for a more complementary approach; and the formation of a National SME Agency to oversee and facilitate the effective provision of business development services.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/97403
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