The starting point for a Focus Group Discussion was an exercise whereby the participants were asked to write down constraints they had encountered in growing or trying to grow their enterprises. These responses were printed on cards, which were placed, in clusters of similar constraints, on the wall for all to see. They became the starting point for more in-depth discussions and were used to reflect the groups' main concerns. The constraints had been written in such a way that they could be categorized as "very severe", "severe" or "moderate". These categories were given scores of 3, 2 or 1 respectively. The data in Table 1 were generated by dividing the total score for each cluster of cards, i.e. category of constraint, by the number of participants. Since each entrepreneur could write as many cards as they felt was warranted, the scores in Table 1 may exceed 3.0.
Thus, Table 1 provides a snapshot of the major findings from the focus group discussions. Taking into consideration also what was learned from a literature survey preceding the empirical work, the main issues emanating from this research are as follows: access to finance, financial management, market orientation and competition, human resources, policies and regulations, and information and networks. The final part of this article will briefly explain the constraints identified in the three categories and suggest what each group would benefit from learning more about how to grow successfully. Findings reported upon below synthesize perceptions of managers as well as the researchers' own analyses.
Access to Finance As noted in the majority of studies (see Biggs & Srivastava, 1996; PAPA, 2000 and World Bank, 1997) managers often perceive financial constraints to be the key obstacle to growth. The current study indicated that inadequacies in the financial system are related to short-term financing as well as long-term investment needs. Liquidity is often lacking and savings are often inadequate to finance major investments. Enterprises thus need to have access to credit lines for purposes of purchasing supplies or covering outstanding credits. They also need to have access to long-term finance for capital investments. Although all categories of enterprises placed this constraint as the highest, it was less of a problem for larger enterprises.
Banks are perceived as non-supportive, especially for expanding enterprises in the mid-size category. Generally, the main problem is perceived to be collateral requirements. Another important concern is the prohibitively high interest rates. Furthermore, in two cases, from two different countries, banks are accused of obstructing the enterprises' access to special low interest loans (funds provided by aid agencies and managed by local banks). The allegation is that banks prefer to lend from their own programs, where the interest rates and the cost to borrowers would be higher. Judging from experiences of the larger enterprises, in order to succeed in securing loans the smaller enterprises must become better negotiators with bank representatives. Among other things, they must be more assertive and market their business ideas better.
Constraints of growth-oriented enterprises in the southern and eastern African region Journal of Developmental Entrepreneurship, Oct 2002 by Trulsson, Per
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