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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Banks and small business
Author:Hawkins, PenelopeISNI
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:small enterprises
business financing
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2002.tb01302.x/pdf
Abstract:The author tests the spectrum of financial provision as a possible conceptual framework to study the distributive behaviour of banks towards different types of borrowers, in this case especially small businesses. Distributive behaviour often seems capricious and it is suggested that institutions and technologies in the banking environment are averse to the risks presented by small businesses. She examines two groups of disadvantaged or turned-down borrowers, those who are financially excluded and those who are placed firmly on the fringes of banking protocol because of their perceived vulnerability. In what she describes as a monetary climate of uncertainty, she investigates the criteria of creditworthiness. This shows that the perception of systemic and borrower risk are interdependent. Borrower risk tends to be judged by rule of thumb which tends to exclude the unconvential or the start-up borrower. Having set the stage, she then proceeds to the spectrum of financial provision, which is later applied specifically to the South African context. She asserts that there is a need for a new institutional approach and new technologies to give more support to start-up and small businesses. She concludes with some suggestions. Bibliogr. [ASC Leiden abstract]