The Challenges In Accessing Finance By The Small And Medium Enterprises (Smes) At Bokamoso Entrepreneurial Centre, Windhoek

ABSTRACT

Small and Medium Enterprises (SMEs) in developing countries, face significant barriers to finance. SMEs are constrained by gaps in the legal and financial systems, lack of skilled human capital and social fragmentation. The fact that SMEs have not made the desired impact on the Namibian economy in spite of all the efforts and support from government, civil society and private sector underscores the extent to which SMEs are challenged. Therefore, this research investigates the challenges in accessing finance by SMEs in Namibia, focusing on the SMEs operating in the Bokamoso Entrepreneurial Centre in Windhoek.

The study used an exploratory and descriptive research design, which involved the use of a structured questionnaire survey of 38 SMEs operating at the Bokamoso Entrepreneurial Centre. The study found that the factors that affecting access to finance in Namibian SMEs are related to human, social and financial capital, where technical and management skills determine the amount of social and financial capital generated for the SMEs. The study also that the challenges of access to finance faced by SMEs in Bokamoso Entrepreneurial Centre are related to the years in operation, major constraints, the information requested by the bank and the reasons for refusal. The study concludes that these financial challenges, affect the overall performance of the SMEs in the Bokamoso Entrepreneurial Centre in Windhoek. Lastly, the study recommends that government intervention in SME’s access to finance should take consideration of the importance of affordable microfinance, as well as the social capital of family and friends.