SME Lending: Do Lending Technologies Matter? Sample Evidence from Zimbabwe

Nyangara, Davis (2013) SME Lending: Do Lending Technologies Matter? Sample Evidence from Zimbabwe.

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Official URL: http://ir.nust.ac.zw/xmlui/handle/123456789/445

Abstract

This is an article published in the journal of World Review of Business Research. The article examines the lending technologies used by Zimbabwean banks to lend money to SMEs. This is examined within the context of Black empowerment and indigenisation policy of Zimbabwe.,This paper examines and tests the claim that bank lending technologies are responsible for the low volume of lending to SMEs in Zimbabwe. Based on a survey of directors of SMEs and bank lending officers, tests are conducted to determine if there is any evidence of discrimination against SMEs based on age, management, size, and information attributes. The study reveals that application of uniform lending criteria to SMEs and large corporates does not result in discrimination against SMEs based on age, size, management, or information attributes. Based on this evidence, the study submits that differences in SME lending between foreign and indigenous banks are due to factors other than their lending technologies. The study further provides rationale for collateral-based lending in the SMEs sector in Zimbabwe. The study however questions the static nature of lending technologies used by banks in Zimbabwe, in the wake of high nonperforming loans.

Item Type: Article
Uncontrolled Keywords: Banking,SMEs,Lending Technologies,Zimbabwe,Black Empowerment,Indegenisation,Financial sector
Divisions: Universities > State Universities > National University of Science and Technology
Depositing User: Mr. Edmore Sibanda
Date Deposited: 01 Dec 2015 00:01
Last Modified: 01 Dec 2015 00:01
URI: http://researchdatabase.ac.zw/id/eprint/1180

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