Restrictions on access to bank finance for SMEs in Cabinda–Angola

Abstract

This study analyses the main constraints faced by small and medium-sized enterprises (SMEs) located in the Cabinda Province, northern Angola, with a specific focus on bank financing. The study takes a qualitative approach, performing semi-structured interviews with 15 SME owners/managers. The results show that in spite of the close relationships with the bank manager and/or the bank's credit manager, whenever SMEs seek bank financing, there are important drivers like the high-interest rates on bank loans, the need to offer high guarantees and bribery when bankers require some form of income. The net profits obtained in previous years do not have a significant impact on obtaining bank support, and banks often consider other factors in their decision-making.