Faculty of Commerce, Law and Management (ETDs)
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Item The role of digital technology in SME funding by Commercial Banks in South Africa(University of the Witwatersrand, Johannesburg, 2023) Chili, Philani; Manessah, AlagbaosoSMEs are the backbone of developing economies, playing an integral role in GDP growth and job creation. South Africa, inclusive of an informal sector, presents a wider SME market, which through adequate support, can contribute significantly to the economy. With the future growth of the economy and improved employment prospects majorly dependent on the contributions of the SME sector as avowed by the South African Government, the success of these constrained businesses is most important. SMEs in South Africa have an average age of five years, with lack of access to financing noted as one of the key inhibiting factors. Although the advent of technology has introduced new financial intermediation players, offering innovative products necessary to drive accessibility to financial services, optimising traditional banks’ larger resources could yield mass benefit. Unlocking the full funding potential of banks through modern technology is therefore critical to support the survive and thrive prospects of SMEs. This study endeavoured to understand existing relationships and the extent to which digital technology can be exploited to improve accessibility to bank funding by SMEs, using literature insights pertaining to information opacity and innovation challenges which stifle progressive SME lending. The study was underpinned by the Disruption Innovation Theory and Information Asymmetry Theory. Following a quantitative approach, structured survey questionnaire data collected from SMEs in South Africa was statistically analysed. SMEs that attempted (whether successfully or not) to obtain funding from traditional banks were of particular interest. Although innovation and technology adoption seemed to drive accessibility to bank funding whilst lack of engagement with innovation activities hindered it, both showed weak correlations and had no statistical significance. Intriguingly, ‘age of business’ showed a statistically significant correlation with accessibility to bank funding, a result that is pertinent to the survival factors of SMEs and warrants further exploration. Whilst SMEs provide a reliable proxy to improved SME lending by banks, it is imperative that perspectives of the banks are included in such a study to make a meaningful contribution to academic research aimed at unearthing relationships that start to edge closer to an optimal SME lending model. In the meantime, the onus lies with SMEs to minimise information opacity and improve fundability through technology as they navigate a somewhat rigid traditional bank system.Item Impact of credit risk management on commercial banks performance in South Africa(University of the Witwatersrand, Johannesburg, 2023) Naidoo, Samantha; Munkuli, BonganiThis study will attempt to analyse the impact of credit risk management on commercial banks in South Africa. The objective is to identify how credit risk is measured and establish a relationship with the performance of commercial banks in South Africa. Two measures of risk were contemplated being the percentage of non-performing loans and the capital adequacy ratio; and its subsequent impact on the performance of the commercial banks, measured by return on equity (ROE). The study looked at six commercial banks in South Africa and using regression analysis found a statistically significant correlation between non-performing loans and performance and that capital adequacy ratio has a greater impact on performance than non-performing loans. It was recommended that commercial banks in South Africa continue with a robust and rigorous credit lending policy; with continuous measurement of loan performance throughout the life of the loan to ensure non-performing loans are kept as low as possible. Furthermore, unremitting management and monitoring of Tier I and Tier II capital will positively impact the performance of the commercial banks in South AfricaItem The Impact of Entrepreneurial Orientation on Market Performance in South African Commercial Banks(University of the Witwatersrand, Johannesburg, 2023) Shandu, Thato Melisizwe; Urban, BorisHeterodox economics has been fundamental in shaping our understanding of the importance of entrepreneurial activity in contributing to economic growth both at a micro and macro level. A large part of facilitating this growth is through the intermediation functions of the financial services sector who like any profit maximising organisation relies on renewal strategies to create value for its customers and generate wealth for its shareholders. To this effect EO represents key entrepreneurial processes by which organisations continuously renew their strategic outlook intended to drive performance and achieve long-term economic value. However, it is difficult to drive renewal strategies for improved performance in the face of scarce information. The motivation of this study was driven by the need to contextually understand the dynamics of the EO-performance relationship in South African listed commercial banks. This study endeavoured to elaborate on and clarify the associative links between the presence of EO dimension (proactiveness, innovativeness and risk-taking) cues and their direct impact on market performance. Secondary textual data gathered from the annual integrated reports of the listed commercial banks was obtained through text analysis to extract the presence of EO cues. The presence of these cues was then assessed in relation to stock price movements which relied on the event-study methodology. Due to small sample challenges, findings from the analysis were not in-line with the priori expectation of the study across all variables and lack generalisability. The study’s finding also add contextual relevance considering the South African regulatory context and the current market dynamics of the financial services sector