The management of interdependence and the sharing of vision by micro-finance agencies for new and emerging SMEs

The purpose of this paper is to conceptualise a theoretical model that clarifies the variations in both processes for sharing vision and interdependence of the lender and the SME owner in micro-finance. Processes for sharing vision and interdependence are possible predictors of the effective tacit and explicit knowledge generation/utilization of a micro-finance agency – SME owner relationship. For new and emerging SMEs the micro-finance agency can provide a critical role in their development. Micro-finance agencies can provide a mechanism in economic development that enables SMEs to have greater speed to markets. The focus of this paper is on the relationship between the micro-finance lending officer and the SME owner. Specifically, the model developed in this paper informs understanding the nature of knowledge generation/utilization between micro-finance agencies and SMEs. Effective generation/utilization facilitates the assessment of the risk for investment. The model clarifies the variations between interdependence and the development of processes for sharing of vision. When you have high interdependence (characterised by good cooperation) and effective processes for sharing of vision, an environment of effective knowledge generation/utilization is likely to be created between the micro-finance agency and the SME owner. The model proposes that the effective management of both tacit and explicit knowledge between the micro-finance agency and SMEs supports them to reach their markets. Implications of this research for SMEs and micro-finance agencies include the increase of knowledge and understanding of SME processes.