Designing the right financing model for microbusinesses in South Africa
Date
2011-11-28
Authors
Ngema, Bhekiwe T.
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Abstract
This paper investigates the prevailing financing models that are used to finance
microbusinesses in developing economies with the objective of adapting one of these models
for use within the South African context. Using India, Brazil, Ghana and Kenya as case
studies the current successful microfinancing models and their advantages and disadvantages
in these countries are assessed. The results indicate that microleasing is a possible effective
financing model that can be used to finance microbusinesses in South Africa. Furthermore,
possible ways of addressing microleasing shortfalls are explored in the paper, by drawing on
the suitable features of financing innovations developed in the other developing economies.
Most importantly, it was also found that the government, donors and the private sector have a
significant role to play in order to encourage further development of the nascent microfinance
industry in South Africa.
Description
Keywords
Small business, Entrepreneurship, Models, Microfinance