Determinants of Business Overdraft Accessibility Within Small and Medium-Sized Enterprises in the South African Construction Industry: A Case of Gauteng Province

Small and medium construction enterprises (SMEs) are an important vehicle to drive the economic growth globally. However, this enterprise sector have been constrained by different factors that stifle there full participation in the mainstream economy specially finance accessibility. There is paucity of research to verify the determinants that predict business overdraft accessibility from financial banks in South Africa. The data was obtained using questionnaire survey. 179 small and medium contractors responded from conveniently sampled respondents in Gauteng province in South Africa. The data was analysed using Statistical Package for the Social Sciences (SPSS) version 22. The study found that the dependant variable i.e. business overdraft was only predicted with locality of the business. However, the other independent variables modelled with business overdraft i.e. gender, age group, current position, type of organization ownership, tax number and collateral were not good predictors of the business overdraft accessibility. The finding informs financial institutions not to force clients to submit collateral before awarding credit to the SMEs. The suggested model that was tested attained the Hosmer and Lemeshow Test goodness of fit. Hence, the results were credible. However, a further study is proposed for the entire country as the researchers acknowledge limitation on the locality of study. This will enable the researchers to generalize the findings.