Demographics

Figure 1: Sex of Respondents

From the figure above, it is clear that the study was gender sensitive and results obtained from the findings incorporated views of both sexes. Female participation was 57%, a figure above the 43 % participation by males. This is not an indication that that there are more women in the SME sector as compared to males.

Figure 2: Age of Respondent

The majority of respondents (61.9%) were aged between 30-40 years indicating that most Namibian entrepreneurs fall in this age group. There was 28.6% participation by the 20-30 age groups and this is an indication that youths in Namibia have a keen interest in SME development. About 9.5% of the people who participated in this study were aged between 4050 years. This indicates that as people grow older, they lose interest in SMEs.

Figure 3: Highest educational qualifications attained

The pie chart shows that the 30% of the respondents are holders of degrees, 15% of respondents are holders of diplomas and 15% of respondents are holders of post graduate degrees. This shows that more than 50% of respondents are educated up tertiary level hence quality recommendations and information can be obtained from these people. 10% of the respondents had no educational qualifications but were not left out in the study because they offered valuable information based on their practical experiences in SME businesses.

Characteristics of the SME

Figure 4: The industry in which the SME operate in

The pie chart above shows that the majority of SMEs in the tertiary / service industry. This is mostly due to barriers of entry that exist in the primary industry through the laws that govern the operation of mining and agricultural firms. The tertiary industry offers a wide range of options to aspiring entrepreneurs hence 60% of SMEs are involved in service provision. 30% of the SMEs are involved in manufacturing/production of goods. This figure is much higher than the proportion of SMEs involved in primary production because the manufacturing

sector offers a diverse range of products. High capital requirements probably the challenge hampering growth of SMEs in primary and secondary industries.

Figure 5: Number of Employees

From the histogram, an SME employ about 4 people. This is a clear indication that by virtue of its size, an SME will face challenges in operating in the agricultural or mining sector since these industries are labour intensive.

Figure 6: Years of operation

SMEs are having an average of 4 years if existence. This shows that most SMEs are dying before they become mature businesses. This could be as a result of lack of access to acquire affordable lines of credit hence expensive lines of credit will present viability challenges.

Figure 7: SME location

From the pie chart above, 48% of the SMEs are situated in the residential areas . This is an indication that most SMEs are facing challenges in obtained funds to develop proper business premises hence end up utilising their homes for business purposes. Only 14% of the SMEs are situated in the light industrial area showing that most SMEs are struggling to operate in these areas which may be too expensive. Another reason is that the light industrial area only opted for by the SMEs involved in manufacturing and production and this is a smaller proportion of the SMEs. 38% of SMEs operate in the CBD periphery simply because the larger proportion of SMEs is involved in service provision, this business thrives in the CBD area hence a large propotion of SMEs is situated at the CBD periphery.

Access to Finance
Figure 8: Availability of the information on SME funding

The majority of respondents cited that information on SME funding is sometimes available to users. About 58% of the respondents shared this view and this indicates that a lot has been done by the responsible institutions as far as information dissemination is concerned. 10% of the respondents also feel that the information is easily available.

From the interviews conducted, 24 % of respondents cited that information is difficult to access, this indicates that information dissemination has been centralised hence there is need to reach out to other areas. About 10% of respondents indicated that the information on funding is not available at all hence little has been done to reach out to marginalised areas.

The respondents indicated that there are a variety of organisations which are making sure that information pertaining to sources of funding is available to those in SMEs. This information is available in banks and financial institutions. Regional councils also have information on government schemes which avail funding to SMEs. Some information is also disseminated through the radio and print media.

Figure 8:Level of cooperation shown by financial institutions when approached by SMEs

From the figure above, it can be noted most respondents feel that financial institutions are doing enough to extend their support to SMEs. About 58% 0f respondents cited that financial institutions are approached by SMEs they are not cooperating. This might be as a result of collateral challenges SMEs face when they approach financial institutions.

Figure 9: The ease at which SMEs access funds availed to them by financial institutions

From the diagram above it is clear that acquiring a line of credit is not an easy task for SMEs, 95% of respondents cited that it is not an easy task to access funding. This particularly because financial institutions tend to look more on collateral security than business viability.

Figure 9: The adequacy of support available to SMEs through financial institutions

From figure 9 above the results of the study show that the majority of respondents(80%) feel that financial institution are not doing enough to support SMEs. This is consistent with earlier observations from previous diagrams

Respondents opinions on the government and private sectors effort in streamlining SME financing. Some respondents cited that the government is making frantic efforts to support the SMEs though the cost of borrowing remains exceedingly high for most of the SMEs. The private sector and banks has not been forthcoming when it comes to lowering the interest rates charged on funds loaned to SMEs. Some respondents also feel that government slow to channel funds to SMEs and most of the time the funds do not reach the intended beneficiaries.

Figure 10 Role played by financial institutions in financing SME

The figure above shows that 62% of the respondents feel that SMEs are not playing their role in adequately funding SMEs. This is attributed to challenges cited earlier on such as viability concerns and collateral challenges.

Challenges facing SMES

The main challenge facing SMEs is the fact that financial institutions look more on collateral than on business viability. This is mainly because SMEs are small businesses with few assets that they can attach as collateral when they access credit lines. This challenge has resulted in most SMEs failing to access funding easily. All respondents (100%) interviewed during the study cited this as a challenge. Most SMEs have no valuable assets to present as collateral but have viable business initiatives which can make them eligible to access credit.

From the study it was also discovered that SMEs are facing challenges in terms of equity contributions. SMES generally have a low capital base by virtue of being small hence may not access the desired level of funding. 73% of the respondents cited this as a challenge. High administration cost, low value and volume of loans required by the SMEs was another challenge. Administration costs incurred from investment analysis and project

implementation may exceed the loan amounts in the case of low value loans hence it will not be rationale to get funding. High interest rates will also come into play when considering administration costs.

Recommendations
The respondents emphasized that there is need for government to educate SMEs on alternative sources of credit and avail cheaper lines of credit to SMEs. The financial institutions should also lower the cost of borrowing so that SMEs can afford to pay back both the principal amount and the interest. The respondents noted that the government should protect infant industries from foreign competition through legislation so that they dont die whilst in their infant stage. The respondents also emphasized the need to come up with alternative sources of credit to SMEs.