Assessing existing financing models amongst black entrepreneurs in the South African wine industry, case of Western Cape

MSc (Agricultural Economics), North-West University, Mahikeng Campus

The South African Wine Industry is a significant component of the agricultural sector in the Western Cape and plays an important role in the province's economy and presents opportunities in terms of agricultural investment into the province. This study explores the existing financing models amongst Black wine entrepreneurs in the Western Cape, South Africa. This study was done to discover the significant contribution of agricultural funding support from both public and private sectors to promote wine sales growth within the wine industry. The objectives of the study are, to describe the socio-economic characteristics of Black wine entrepreneurs, assess the existing financing models amongst the black wine entrepreneurs, to describe the trend analysis of market sales growth amongst the Black wine entrepreneurs, the perception of the Black wine entrepreneurs on the existing financing models, to determine the factors influencing the market sales growth amongst the Black Wine entrepreneurs and lastly, to determine the contribution of the existing financing models on the market sales growth amongst the Black wine entrepreneurs in the Western Cape Province. Descriptive statistical analysis was used to describe the socio-economic characteristics of Black wine entrepreneurs, assess the existing financing models amongst the Black wine entrepreneurs, to describe the trend analysis of market sales growth amongst the Black wine entrepreneurs and to find out or measure the perception of the Black wine entrepreneurs on the existing financing models. The Linear Regression model was used to determine the factors influencing the market sales growth amongst the Black wine entrepreneurs and lastly to determine the contribution of the existing financing models on the market sales growth amongst the Black wine entrepreneurs in the Western Cape Province. Descriptive statistics of the sampled data revealed that 24 of the females receive support throughout the grant funding and 20 of the males received the same support. Furthermore, the descriptive statistical analysis indicated that 81% of the farmers had positive perceptions, while 19% had negative perceptions. Based on descriptive analysis, this study concludes that the existing financing models have a positive effect on the market sales growth. Therefore, the study accepts the research hypothesis that “Existing financing models such as statutory levy fund, private donors, credit and government support influence market sales growth amongst the black wine entrepreneurs in the Western Cape Province ”. The model results further revealed socio-economic variables such as gender of the farmer, educational level, market access, access loan from a bank or financial institution, financial management training, wine-making training, source of capital, access to private companies and interest from personal investment. BEE status and capital access proved to have a significant effect on the market sales growth. Therefore, it is relevant to conclude that in the Western Cape , the existing financing models play a vital role in increasing the market sales growth as well as improving the state of businesses amongst the Black wine entrepreneurs. Furthermore, this study recommends the collaboration between government and financial institutions such as Land Banks, First National Bank, Absa, Standard Bank and Nedbank as well as the Capitec Bank that are recently interested in supporting agriculture. This collaboration needs to ease the loan or credit acquisition pre-requisite so that Black entrepreneurs are not excluded and limited in accessing loan funds from these financial institutions.

Masters