Relationship between finance availability and rate of Small-Medium Enterprises listed in the Johannesburg stock exchange alternative exchange index

Abstract

Financial availability plays a great role in the development and growth of a new venture. However, factors such as an inconsistent cash flow, mismanagement of funds, excessive debt and poor marketing can impede the growth of a business. Therefore, this study investigated the relationship between Finance Availability and Entrepreneurial Ownership Activity in JSE ALTX Listed Companies in South Africa. The study employed a regression analysis of 262 companies listed in JSE ALTX. The outcome of the regression analysis shows that a percentage change in financial availability affects both newly registered and existing businesses negatively by 3% and 5%, respectively, thus, resulting in 11% in business discontinuation. Therefore, this study recommends that both entrepreneurs and financial institutions work together to foster an environment that promotes entrepreneurship. Entrepreneurs should ensure that they have a well-thought-out business plan, complete with financial forecasts and a clear growth strategy. Simultaneously, financial institutions should offer a variety of funding options tailored to the needs of entrepreneurs, including loans, venture capital, and angel investments. Additionally, government policies should support entrepreneurship by providing tax incentives and creating an enabling regulatory framework.