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Author: search.filters.author.Msomi, Thabiso SthembisoStart date: 2022

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Now showing 1 - 10 of 23
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    Fraud mitigation practices and profitability of insurance companies in South Africa
    (2024-03-01) Msomi, Thabiso Sthembiso
    The objective of this study was to evaluate how measures taken to prevent fraud impact the profitability of insurance companies operating in South Africa. The study adopted a descriptive research approach and surveyed a sample of 70 licensed insurance companies in the country. Primary sources of data were obtained by engaging claims managers in each of the firms, and descriptive and inferential statistics were used to analyse the data. The results of the study revealed that fraud mitigation measures significantly affect the profitability of insurance companies in South Africa. The implementation of fraud prevention, detection, and response measures had a positive impact on the profitability of these firms. Based on the findings, the study recommends that the Insurance Regulatory Authority establish regulations that mandate all insurance providers to collect and report statistics on fraud. Insurance firms should provide their employees with comprehensive training on fraud management and implement strict penalties and disciplinary measures for employees involved in fraudulent activities, as they can undermine the effectiveness of the fraud mitigation process.
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    Credit accessibility and viability of small and medium enterprises in South Africa
    (Editura Universitara Danubius, 2022-02-09) Msomi, Thabiso Sthembiso; Maharaj, Avika
    Small and medium businesses (SMEs) play a significant role in supporting economic expansion in economies worldwide. However, lack of accessibility to credit funding has been a major stumbling block in transitioning these businesses from just profitable to ensuring growth and long-term viability. The aim of this research paper was to explore the correlation between access to credit funding obtained and the impact it has on the viability of SMEs. The objectives of the study were to: Investigate the scarcity of accessing credit; Analyze the relationship between access to credit and its impact on the viability of SMEs. The methodology included a quantitative research approach. The methodology included a quantitative research approach. The research design was descriptive, and cross-sectional. The study targeted 105 SMEs operating in KwaZulu Natal, South Africa. The findings revealed that 75.73% SMEs who secure finance to fund their business have observed a positive correlation to the success and viability of their business. 81% of SMEs indicated that a shortage of collateral/security, 52% revealed a dearth of a statement of cash flows, and an absence of owners’ equity impede them from obtaining financing. Also, a study revealed a positive correlation between Access to Credit and viability of Small and Medium Enterprises (r=0.250, p<0.0005). The study recommended that banks and government authorities should increase their assistance to aid SMEs with financial, operational, business, and marketing assistance through a variety of regulatory methods. These may include the supply of collateral when establishing and supporting various credit programs for SMEs. The information asymmetry problem can be alleviated by improving legislation, improving entrepreneurial skills and education for SMEs.
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    Evaluating the influence of leverage and liquidity on the financial performance of general insurance companies in Sub-Saharan Africa
    (LLC CPC Business Perspectives, 2022-08-05) Msomi, Thabiso Sthembiso
    The factors of the insurance industry’s business performance are of concern to a variety of participants in any economy, such as the government, politicians, policyholders, and speculators. There has been very little research on this issue in Sub-Saharan Africa, with the majority focusing on specific factors that influence the performance of insurance businesses. The purpose of this paper was to evaluate the influence of leverage and liquidity on financial performance of general insurance companies in Sub-Saharan Africa. The study used descriptive correlational techniques to obtain panel data across 113 general insurers operating in Sub-Saharan Africa as of December 31, 2019, for 11 years (2008–2019). The pooled OLS, fixed effects and random effects models were estimated with the financial performance measures (proxied by ROA) as the dependent variables where the Hausman test was employed to test the hypothesis. The study found that there is a negative negligible link between leverage and financial performance, whereas there is a positive association between liquidity and financial performance. The study suggested that proper liquidity management is critical for insurance businesses to enhance a company’s value as well as financial success. The focus should be on establishing a proper asset-liability mix, in which a company’s total liabilities do not exceed its total assets. Furthermore, organizations require cash flow policy recommendations to optimize profit potential while limiting liquidity risk in the financial statement.
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    Factors affecting non-performing loans in commercial banks of selected West African countries
    (LLC CPC Business Perspectives, 2022-01-19) Msomi, Thabiso Sthembiso
    This paper examines the macro-economic and bank-specific factors affecting non-performing loans in commercial banks. Using 47 listed commercial banks from six countries, namely 19 banks from Nigeria, 14 banks from Benin, 3 banks from Burkina Faso, 3 banks from Gambia, 3 banks from Guinea, and 5 banks from Liberia for the period 2008 to 2019, fixed and random effect model was used. The Hausman test favored the selection of fixed effect model, and it was found from the estimation that the liquidity ratio, capital adequacy ratio and inflation rate significantly affect non-performing loans. As a result, it is advised that banks depend not only on their ability to achieve the capital adequacy ratio, but also guarantee that loans are thoroughly scrutinized before being issued to beneficiaries. Bank managers should guarantee that banking staff is not simply awarding loans to secure their jobs by accumulating deposits from consumers at the price of the bank’s long-term stake. In addition, the economies of West Africa should keep their inflation rates low so that repayment of loans on time is cheap and realistic. Acknowledgment I would like to appreciate Fezile Nonjabulo Gcwabaza for love and support throughout this research project.
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    Debtors’ management practices and resilience of small and medium enterprises in South Africa
    (International Journal of Social Science Research and Review, 2024-01-19) Msomi, Thabiso Sthembiso; Matemane, Reon; Zungu, Sphesihle Charles; Campbell, Thomas
    Aim: This research aimed to assess the relationship between debtors’ management practices and the resilience of small and medium-sized enterprises in South Africa. Methods: Employing a quantitative research design, the study employed purposive sampling to select a cohort of 110 SME owners operating in Durban, South Africa. 94% response rate was achieved, yielding 103 valid responses. Results: The results of the analysis unveiled a statistically significant positive correlation between effective debt management and the resilience of SMEs. This empirical evidence signifies that proficient debtors' management plays a pivotal role in enhancing the resilience of SMEs operating in South Africa. Contribution: This study contributes to the growing body of knowledge by affirming the positive influence of debtors' management on the resilience of SMEs in South Africa. Drawing on the findings of this study, government agencies and industry associations should collaborate to develop supportive initiatives and policies that aid SMEs in optimizing their debt management strategies.
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    Evaluating access to information, access to finances, firm competition and small medium enterprise performance in South Africa
    (Editura Universitara Danubius, 2022-02-02) Msomi, Thabiso Sthembiso; Yearwood, Verna; Msomi, Mbali Portia
    At the center of poor performance of SME is lack of access to information, inaccessibility of finances and lack of firm competitiveness. Hence this study evaluates the access to Information, access to finances, firm competition and Small Medium Enterprise performance in South Africa. This employed a quantitative approach which was supported by the positivist paradigm. The study used the sample size of 140 SMEs. SME owners or suitable representative were selected using the purposive sample technique. The results of the study revealed a positive correlation between access to information, access to finances and SME performance. On the other hand, a negative correlation between firm competition and SME performance was observed. The study recommended that financial institution should remove the limit on the amount of money the SME may borrow if they have appropriate collateral. Also, financial institutions should employ realistic loan repayment procedures in order to attract more clients and so enhance credit access. Finally, the research and the study urge that the government consider providing incentives for SMEs by holding workshops, seminars, and conferences to strengthen SMEs management abilities and keep them up to speed on continuous learning available in the market that would boost performance.
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    Dynamic panel investigation of the determinants of South African commercial banks’ operational efficiency
    (LLC CPC Business Perspectives, 2022-11-02) Msomi, Thabiso Sthembiso; Olarewaju, Odunayo Magret
    Like any other business, commercial banks are greatly affected by the micro and macro-environment that operate in, no matter how large they are. Capital adequacy ratio, credit risk, money supply, inflation, the exchange rate, and the national gross domestic product have been noted to be the key determinants of bank operational efficiency. This research study looked at the operational efficiency of four large South African banks, namely, Standard Bank, Absa, Nedbank, and First National Bank. A quantitative, descriptive, correlation design was employed, and the System-Generalized Method of Moments (SYS-GMM) techniques were used and revealed that operational efficiency was positively correlated with capital adequacy ratio, credit risk, inflation, and exchange rate, and negatively correlated with profitability, money supply and GDP. SYS-GMM estimates show that capital adequacy ratio, credit risk, inflation and exchange rate positively influenced operational efficiency, while profitability, money supply (M3) and GDP had a negative influence. Thus, it is concluded that bank management should decrease administrative costs, evaluate customers’ creditworthiness before issuing loans, raise bank size as operational conditions require, boost intermediation, and anticipate inflation to operate more efficiently.
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    Factors affecting small and medium-sized enterprises financial resilience post Covid-19 pandemic in South Africa
    (PT Keberlanjutan Strategis Indonesia, 2023-11) Msomi, Thabiso Sthembiso; Zungu, Sphesihle Charles
    This research paper aims to investigate the factors influencing the financial resilience of SMEs in South Africa in the aftermath of the COVID-19 pandemic. The study focuses on three primary factors: access to loans, the interest rates applied to these loans, and the structure of repayment plans. To achieve this purpose, a quantitative research methodology, guided by the positivism philosophical framework, was employed. The research selected 310 respondents who were SME owners representing various sectors. The data collection and analysis methods primarily involved multivariate regression analysis. The research revealed that access to loans, interest rates on loans, and the design of repayment plans exerted positive and statistically significant effects on the financial resilience of SMEs in the post-COVID-19 period. These factors displayed probability values of 0.005 and absolute values of 0.448, 0.456, and 0.432, respectively. These findings underscore the crucial role of these factors in determining the financial stability of SMEs. The study's implications are twofold. First, it suggests that financial institutions should streamline the process for SMEs to access financing, making it more accessible and accommodating. Furthermore, these institutions should tailor loan repayment options to better align with the unique needs of SMEs. Second, the research underscores the importance of offering financial education and support services to assist SMEs in enhancing their financial management skills and adaptability within the post-pandemic economic landscape.
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    Financial literacy and SME loan repayments in South Africa during the COVID-19 era
    (LLC CPC Business Perspectives, 2022-11-04) Msomi, Thabiso Sthembiso; Nzama, Smangele
    Small and medium-sized enterprises (SMEs) are the primary victims of the COVID-19 outbreak because they lack adequate resources and are poorly prepared for such interruptions. For SMEs to expand, they need financial assistance such as loans and advances from financial service providers. However, they struggle to repay these loans and advances because they are small in size and do not make large turnovers, and owners lack adequate financial literacy. This study aims to investigate the relationship between financial literacy and loan repayment of SMEs. The study followed a positivist paradigm, and a quantitative approach was employed. A total of 110 self-completed Likert questionnaires were distributed, only 107 were filled correctly and analyzed using SPSS. The results from Pearson’s correlation coefficient showed a strong and significant relationship between financial literacy and SME loan repayments at r = 0.324, P < 0.0005. Regression analysis showed a significant linear relationship between financial literacy and SME loans repayments, F (1.152) = 17.806; P < 0.0005. P < 0.0005 is less than the independent variable (SME loans repayments), B = 0.324, P < 0.0005. The results imply that if SME owners are well-versed in finance, they will be capable of repaying outstanding loans and advances timely.
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    Factors affecting the profitability of reinsurance companies in sub-Saharan Africa : evidence from dynamic panel analysis
    (Informa UK Limited, 2022-12-31) Olarewaju, Odunayo Magret; Msomi, Thabiso Sthembiso
    This study, which analysed the profitability of 42 reinsurers in Sub-Saharan Africa from 1991 to 2020, revealed that various factors such as gross domestic product, competition (HHI), premium growth, investment performance, underwriting risk, and operational efficiency affect the profitability in these companies. This study is quantitative and dynamic using system-generalised method of moments to analyse the data. The study discovered that reinsurers should broaden their services to remain highly competitive and boost their premium growth such that their profitability is sustained. Also, there should be a separate department of qualified professionals overseeing the adequate management of risk before sealing ceding agreement with insurers.