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What Determines the Access to Finance of SMEs? Evidence from the Egyptian Case

Author

Listed:
  • Hala El-Said
  • Mahmoud Al-Said
  • Chahir Zaki

    (Faculty of Economics and Political Science, Cairo University)

Abstract

Financial services seem to be underutilized by small and medium enterprises (SMEs); only 50 percent deal with banks and benefit from an improved access to finance. In addition, these firms still face several constraints in terms of access to finance. Using an extensive census that has been recently conducted by the Egyptian Banking Institute, we try to examine the determinants of access to finance for SMEs in Egypt as well as the determinants of having banking problems. The main findings of this paper show that legal form, economic activity, labor, capital, and sales turnover have a significant effect on having banking facilities. In addition, we find that the smaller the firm, the higher the probability of having banking problems. We also run a battery of sensitivity analysis tests and still find that the results remain robust.

Suggested Citation

  • Hala El-Said & Mahmoud Al-Said & Chahir Zaki, 2013. "What Determines the Access to Finance of SMEs? Evidence from the Egyptian Case," Working Papers 752, Economic Research Forum, revised May 2013.
    • Handle: RePEc:erg:wpaper:752
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    References listed on IDEAS

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    Cited by:

    1. Hala El-Said & Mahmoud Al-Said & Chahir Zaki, 2015. "Trade and access to finance of SMEs: is there a nexus?," Applied Economics, Taylor & Francis Journals, vol. 47(39), pages 4184-4199, August.
    2. Abu Ayob & Shamshubaridah Ramlee & Aisyah Abdul Rahman, 2015. "Financial factors and export behavior of small and medium-sized enterprises in an emerging economy," Journal of International Entrepreneurship, Springer, vol. 13(1), pages 49-66, March.
    3. Ali Rashed & Maia Sieverding, 2014. "Micro and Small Household Enterprises in Egypt: Potential for Growth and Employment Generation," Working Papers 831, Economic Research Forum, revised May 2014.
    4. Aboushady, Nora & Zaki, Chahir, 2016. "Productivity, Exports Performance and Investment Climate: Evidence from Firm Level-Data," Conference papers 332689, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Nancy Ahmed & Seung-Hwan Kim, 2020. "Developing Small and Medium-Sized Enterprises in Islamic Developing Countries: Exploring the Influential Factors for Egypt," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(6), pages 670-679, June.
    6. Nora Aboushady & Chahir Zaki, 2019. "Investment climate and Trade Margins in Egypt: Which Factors Do Matter?," Economics Bulletin, AccessEcon, vol. 39(4), pages 2275-2301.

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