Investigating the role played by a commercial bank in financing SMEs in Windhoek, Namibia
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Authors
Iitembu, Rauna Ndilokelwa
Issue Date
2025
Type
Dissertation
Language
en
Keywords
Banking institutions , Commercial banks , Digitisation , Financial resources , Financing Guarantee Scheme , Government regulations , SMEs , Start-up capital , SDG 8 Decent Work and Economic Growth
Alternative Title
Abstract
Small and Medium Enterprises (SMEs) are essential to economic development, yet their expansion in the Republic of Namibia encounters various challenges, including limited access to financing, insufficient technical and management expertise, and regulatory impediments. The Namibian government has enacted policies and measures to improve SME performance by providing financial aid, managerial training, and support for value addition, technology acquisition, and market access. This study investigates the role of a bank in financing SMEs in Windhoek, Namibia, concentrating on the volume of loan offerings, the obstacles SMEs encounter in obtaining bank funding, and the criteria for securing loans.
A mixed-methods research strategy was utilised, gathering primary data via an online survey of 66 SMEs and semi-structured interviews with bank personnel working in the Credit Department. The results indicated multiple impediments to SMEs expansion, such as limited credit, bureaucratic obstacles, low financial literacy, and elevated interest rates. Obstacles to securing money comprised insufficient collateral, inadequate financial documents, restricted credit history, and rigorous lending requirements. These barriers obstruct SMEs' access to financing and hamper their capacity to prosper.
The study made a significant contribution to existing literature by identifying key barriers that SMEs face in accessing bank financing, such as limited credit, bureaucratic obstacles, low financial literacy, high interest rates, insufficient collateral, inadequate financial documents, restricted credit history, and stringent lending requirements. Furthermore, the study underscores the critical role of commercial banks in providing financial leverage for SMEs and offers practical recommendations to improve SME access to financing, including enhancing financial records, providing financial literacy training, implementing innovative collateral methods, and promoting government-backed lending schemes. By employing a mixed-methods research strategy, the study provides comprehensive empirical data and insights into the financing landscape for SMEs in Windhoek, highlighting the importance of SMEs in job creation and economic growth.
The study recommends improving financial records among SMEs, providing financial literacy training, implementing innovative collateral methods, and promoting government-backed lending schemes to mitigate these difficulties. Through the implementation of these policies, banks and policymakers can enhance support for SME development, hence promoting economic growth in Namibia.
Description
Text in English