Success Factors of Securing Business Loans from Commercial Banks among Poorly Resourced Retail Businesses

Abstract

Retail businesses that operate in the various locations, townships and cities of Gauteng Province are highly valuable for alleviating poverty and unemployment among poorly skilled South Africans. Although such business enterprises are integral for alleviating poverty and unemployment, not enough support is provided to them in terms of entrepreneurial capacity building and easing the task of securing business loans from commercial banks. The ability to utilise digital, online and e-commerce applications is highly valuable for ensuring continued survival in poorly resourced retail enterprises. Research has shown that difficulty in securing business loans from commercial banks is a primary cause of failure in poorly resourced retail enterprises in Gauteng Province. The research was carried out in an attempt to identify determinants of success in securing business loans in poorly resourced retail enterprises in Gauteng Province. The sample size of study was 592small, micro and medium-sized enterprises (SMMEs) operating in the retail sector. The results showed that the ability of poorly resourced retail enterprises to secure business loans from ion analysis, and factor analysis. The study found that just under 27% of retail businesses managed to secure business loans for starting up retail businesses. The results showed that the ability to secure business loans from commercial banks was significantly influenced by 3 factors. These were level of skills in entrepreneurship, use of social media for marketing and networking, and level of networking skills.