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FACTORS AFFECTING ACCESS TO FINANCE OF SMALL AND MEDIUM ENTERPRISES (SMEs) OF BANGLADESH

Author

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  • PhD Mohammed CHOWDHURY

    (Touro College and the University System, New York, United States of America)

  • Zahurul ALAM

    (University of Chittagong, Bangladesh)

Abstract

This study addresses the issues that impede SMEs of Bangladesh in obtaining finance from the financial institutions. To accomplish our goals we collected data from a sample of 86 SMEs to investigate the problems and suggest policy recommendations. We collected data by directly interviewing the respondents with the help of a questionnaire for self-guidance. We also used secondary data for this purpose. Findings revealed that the size and age of the firms, education and skills of the owners, and unfavorable credit terms such as high interest rates, lack of collateral security, corruption by bank officials etc. are some of the biggest hurdles that SMEs in Bangladesh face in getting loans from financial institutions. The limitation is that the study has included one city in its sample population. A nationwide study where there are SMEs in large numbers could lead to better results for this kind of study. The implication is that small businesses, as opposed to the larger ones, face funding obstacles and are discriminated by the financial institutions in granting loans. Built on current literatures and research on SMEs, specially in regard to their ability to access finance, this study captures the information relating to problems identified by SMEs in having access to finance and suggesting the ways and means needed for strengthening the SMEs access to finance for their expansion and growth.

Suggested Citation

  • PhD Mohammed CHOWDHURY & Zahurul ALAM, 2017. "FACTORS AFFECTING ACCESS TO FINANCE OF SMALL AND MEDIUM ENTERPRISES (SMEs) OF BANGLADESH," The USV Annals of Economics and Public Administration, Stefan cel Mare University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 17(2(26)), pages 55-68, December.
    • Handle: RePEc:scm:usvaep:v:17:y:2017:i:2(26):p:55-68
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    Citations

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    Cited by:

    1. Ismail Sheik, 2023. "Navigating the digital divide: exploring the multifaceted 4IR challenges and technological disparities encountered by SMMEs within Kwazulu-Natal, South Africa," Technology audit and production reserves, PC TECHNOLOGY CENTER, vol. 5(4(73)), pages 6-11, September.
    2. Terence Achiangea Aminkeng & Song Huaming & Ngoe Bosambe Mukete & Gershom Endelani Mwalupaso, 2024. "Impact of Credit Constraints on Financial Performance of Small and Medium Size Enterprises," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(4), pages 868-896, August.
    3. Nurul Mohammad Zayed & Isse Sudi Mohamed & Khan Mohammad Anwarul Islam & Iryna Perevozova & Vitalii Nitsenko & Olena Morozova, 2022. "Factors Influencing the Financial Situation and Management of Small and Medium Enterprises," JRFM, MDPI, vol. 15(12), pages 1-16, November.
    4. Obed I. Ojonta & Divine N. Obodoechi & Paschaline N. Ugwu, 2021. "Start-up Capital Source and Credit Access Participation of Household Nonfarm Enterprises in Nigeria: Evidence from Logistic Regression Model," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 19(3 (Fall)), pages 249-267.
    5. Rozina Akther, 2022. "Factors associated with small and medium enterprise financing: a study from Bangladesh," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 265-277, December.

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