Abstract:
This study examines factors influencing access to credit by SMEs in Botswana. Using the
2010 World Bank Enterprise Survey, and employing logit model for analysis, we find that
access to credit is influenced by gender, citizenship and experience of the entrepreneur;
as well as firm-size, sector of business,sales and land ownership. Therefore, public policy
must pay attention to the diversities of SMEs’ socio-economic characteristics as well as
the business environment in which they operate when implementing finance assistance
progammes. Measures to develop SMEs must be carefully focused, aiming at providing
incentives for financial institutions to play an active role in SME financing. Government
must formulate policies that will make finance institutions relax their requirements
and lending procedures which tend to discourage borrowing. Similarly, public policy
must be focused on strengthening the business acumen of SMEs through trainings and
workshops, such that they are perceived attractive to financiers.
