Credit accessibility and viability of Small and Medium Enterprises in South Africa



Scarcity of funding, credit accessibility, business viability


Small and medium businesses (SMEs) play a significant role in supporting economic expansion in economies worldwide. However, lack of accessibility to credit funding has been a major stumbling block in transitioning these businesses from just profitable to ensuring growth and long-term viability. The aim of this research paper was to explore the correlation between access to credit funding obtained and the impact it has on the viability of SMEs. The objectives of the study were to: Investigate the scarcity of accessing credit; Analyze the relationship between access to credit and its impact on the viability of SMEs. The methodology included a quantitative research approach. The methodology included a quantitative research approach. The research design was descriptive, and cross-sectional. The study targeted 105 SMEs operating in KwaZulu-Natal, South Africa. The findings revealed that 75.73% SMEs who secure finance to fund their business have observed a positive correlation to the success and viability of their business. 81% of SMEs indicated that a shortage of collateral/security, 52% revealed a dearth of a statement of cash flows, and an absence of owners’ equity impede them from obtaining financing. Also, a study revealed a positive correlation between Access to Credit and viability of Small and Medium Enterprises (r=0.250, p<0.0005). The study recommended that banks and government authorities should increase their assistance to aid SMEs with financial, operational, business, and marketing assistance through a variety of regulatory methods. These may include the supply of collateral when establishing and supporting various credit programs for SMEs. The information asymmetry problem can be alleviated by improving legislation, improving entrepreneurial skills and education for SMEs.


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How to Cite

MSOMI, T. S., & Maharaj, A. . (2022). Credit accessibility and viability of Small and Medium Enterprises in South Africa: Array. The Journal of Accounting and Management, 12(1). Retrieved from