n Management Dynamics : Journal of the Southern African Institute for Management Scientists - Creating wealth by financing small and medium enterprises of owners who possess entrepreneurial skills

Volume 11, Issue 1
  • ISSN : 1019-567X



Entrepreneurs are regarded as essential for real economic development. The identification of entrepreneurs for financing small and medium-sized enterprises (SMEs) will be more successful if entrepreneurial ability and not only functional and management skills are evaluated. The financing of enterprise owners with entrepreneurial ability will enhance economic development. Furthermore, the financing of small and medium-sized enterprises will be able to make a contribution if financiers consider not only the enterprise transaction of the applicant, but also the entrepreneurial potential for successful ownership. <br>The traditional criteria for solvency are not sufficient, and additional finance criteria based on the success factors of owners of small enterprises, should be considered. The use of finance criteria for evaluation of the applicant will enhance the success of the enterprise, as it can be more easily determined in advance whether the applicant possesses the necessary characteristics to successfully establish and manage an enterprise.

Two of the most important entrepreneurial skills, namely innovation and the willingness to take risks, have been identified as two success factors in this research. However, these two success factors are not evaluated by financiers, or are used only on a limited scale. Potential methods to identify whether the applicant possesses these success factors, based on an extensive literature study on research related to this, are recommended.

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