Factors Influencing the Success of Cash Loan Businesses (Botswana) In 2014

Abstract

Bank of Botswana’s mission is to contribute towards the financial well being of the financial sector so that Botswana attains orderly, balanced and sustainable economic development (Bank of Botswana Annual Report, 2013). This, among other objectives, is directly intended to lead to the creation of many and varied financial enterprises in order to achieve total financial inclusivity of the entire population. Sadly, most of the Cash Loan Businesses (CLBs) are performing below expectations; teetering on the brink of collapse; and most do not even seem to grow and develop into large entities. This paper seeks to identify factors contributing to the success of CLBs owned by private individuals and, ultimately, determine a model for their success. A sample of 99 respondents comprising of CLBs owners/managers and clients were identified in Maun and interviewed using predesigned interview guideline questions which sought to identify factors influencing their success. Results were summarized and common themes were identified. A qualitative prediction model was then developed to identify what contributes towards the success of CLBs. Groups of factors comprising of entrepreneur’s personality traits and skills, project idea attributes, managerial skills and training, organizational characteristics and the external environment were identified as critical elements defining success or failure of a CLB.