Understanding the small business sector

Using a qualitative methodology approach, a case study research design by way of in-depth semi-structured interview(s) was followed to interview farmers, commercial banks, development banks, venture capitals and private equities to determine the financing options available for farmers and provide reasons why some financial institutions shy away from providing finance to agricultural enterprises. This study deviates from prior studies which have focused on small-scale farmers and subjected farmers’ access to finance to rural credit markets, mostly informal money lenders using secondary information mostly from household surveys to build econometric models. The study indicates that only about 33 percent of formal financial institutions are providing finance to agricultural SMEs. The lack of expertise and perception of risk were cited as top reasons why formal financial institutions find it hard to provide finance to agricultural SMEs. Building on opinions from other authors cited in this paper, we maintain that new financing mechanisms can be achieved by all types of financial institutions through learning from experiences by other successful countries.

/pdf/unfulfilled-loan-demand-among-agro-smes-in-namibia-15xkbp4l8e.pdf

Unfulfilled loan demand among agro SMEs in Namibia

The excessively expensive and inaccessibility to bank finance by many contractors for financing the construction industry among other factors explains the underdeveloped nature of the construction industry in Ghana. Trade credits which have been recognized in extant literature as both a substitute and complement to bank financing is also experiencing a market failure; yet, little to nothing is known about the constraints faced by supplier in extending trade credits to their contractors. This may lead to a weak reliance on findings from other economies for policy trade credit formulation. Nonetheless, contradictions about the cost of trade credit compared with bank finance and its position in the pecking order indicate that country-specific evidence is imperative. By adopting the Relative Importance Index (RII) aided by Principal Component Analysis (PCA) in analysing data collected from 75 SME construction merchants within the Kumasi metropolis of Ghana, the study concludes that three interwoven principal components: (1) Asymmetric Information (2) Weak Legal Environment and (3) Weak Macroeconomic Variables are the constraints to trade credit supply in Ghana. Asymmetric information is characterised by poor accounting standards and little education on trade credit; while the difficulty in enforcing the terms of trade credit contracts expand creditors’ risk constituting a weak legal environment. The high cost of financing materials acquisition underscored by high interest rates prices-out many buyers, which disincentivises the offering of trade credit. Theoretically, three trade credit models including the Agency Model, Financial/Liquidity Theory and the Marketing Theory are applicable in explaining the low levels of trade credit financing in Ghana. Practically, the paper provides a basis for budding appropriate trade credit policies and market in Ghana. Future research could concentrate on developing a framework for trade credit contracts in Ghana as well as developing mechanisms to overcome information asymmetry. We could further look at assessing the potential role of trade credit in the development of the Ghanaian construction industry, and how the establishment of a construction industry regulatory agency could promote the development of trade credit options. Keywords: Legal Environment, Trade Credit, Contract Enforcement, Constraints, Asymmetric Information.

/pdf/towards-developing-trade-credit-policies-in-the-ghanaian-2jowp52ng1.pdf

Towards Developing Trade Credit Policies in the Ghanaian Construction Industry: An Analysis of Constraints

This study examines the impact of lending from commercial banks on performance of small enterprises. Financial data of forty business entities of district Hafizabad have been collected from commercial banks, for the period of 2005 to 2013. “Net profit” in the first model and “sales” in the second model are used as dependent variables. Working capital, accumulated profit, net-worth and lending/financing amount are used as independent variables. The study suggests: Firstly, banks’ lending positively affects the performance of small enterprises. Secondly, financing amount illustrates positive effect on net profits of the firms. Thirdly, the preferred amount of lending to small enterprises is less than two million PKR.

How Does Lending from Commercial Banks Impact Performance of Small Enterprises: A Case Study of District Hafizabad, Pakistan

This chapter attempts to answer the question of how wide the agricultural finance gap is in Namibia and the causes of such a gap. Focusing on the demand-supply gap analysis theory, the chapter draws attention to the magnitude of finance gaps found in other countries and reasons why a finance gap exists in agriculture citing methodologies explained by various authors. A quantitative approach is explored to estimate the finance gap in Namibia and a qualitative approach to explain the causes of such a gap using narratives. The study concludes by providing examples from successful banks such as Bank Rakyat Indonesia on some of the alternative ways to provide finance to irrigation farmers

Identifying the Gap Between the Demand and Supply of Agricultural Finance Among Irrigation Farmers in Namibia

The paper aims at contributing to the knowledge in the area of small enterprise finance. The research is based on quantitative research design and a survey of the small enterprises in Sunyani Township that were selected using convenience sample method for a sample of 106. Data were analysed using percentages and one-ANOVA with SPSS 16.0. The findings indicate that Small business owners appeared to have high satisfaction with the products and services offered by their financial institution and hence have not changed their bank/financial institution. They have also experienced a change in terms and conditions of the financing arrangements, but have not experienced a change in charges, fees, and interests. More credit will be used to seize business expansion, fund business growth. Credit has not also been a problem over the years under consideration and that there has been a competitive banking and finance industry. Demographic variables significantly influence some of the responses of the respondents. In future, researchers should research into the issue of relationship lending and also the determinant of bank selection among the small businesses in the study area in a comparative analysis of the rural banks and the Big banks. Further study should look at the knowledge level of small businesses in relation to the various financing schemes available in the country. KEY WORDS: Banks, Employment, Finance, Relationship lending, small enterprise,

/pdf/what-are-small-enterprises-finance-needs-1m09dlsfqm.pdf

What are small enterprises finance needs

Handle everyday research tasks with reliable, citation-backed results

Your personal Research Agent to handle research tasks with citation-backed results

Popular Tasks used by Researchers

How can I help with your research?

Meet SciSpace

Get more enhanced response by uploading the PDFs you want me to reference.

No relevant PDFs in your library

SciSpace is the AI research assistant for academics. Run systematic literature reviews on 280M+ papers, and write papers with cited sources. Trusted by 1M+ students, PhDs & researchers.

SciSpace | AI for Research

Analyze PDFs

Code & Manuscripts

Funding & Grants

Literature & Patents

Medical & Clinical Data

Systematic Review

Visualize & Present

Web & Data

Build a Google Scholar-like website for your research.

Build a website

Create charts and images for your research

Create a Chart

Write a paper for submission to a journal

Draft a manuscript

Patent Search

Design eye-catching scientific posters in minutes.

Scientific Poster Generation

Systematic Literature Review

One task is running at the moment. Your messages will be shown right after.

Drag and drop or click here to browse

Loved by <highlight>1 million+</highlight> researchers

Extract a list of specific topics and their sources from unstructured text

Topics

Compare and analyze relevant papers that matches with your search

Papers

Get insights from PDFs and bookmarked papers from your library

My library

Recent searches

Try searching for:

Catch AI-generated content in scholarly and non-scholarly content

{ai} Detector

Ai Writer

Get PDF Summaries, highlighted text explanations 

Chat with PDF

Effortlessly create in-text citations and bibliographies in APA and 2,500 other formats

Citation generator

Get explanations, summaries, and answers on academic papers

Ease up your research workflow with {scispace}'s cohort of exciting AI tools

Elevate your academic writing skills and convey your ideas the way you want

Paraphraser

Explore our range of reading and writing tools

Your file is being prepared and should be ready in a few minutes. If it's a large file, it might take a bit longer. You can close this window, and we'll email you the file when it's done.

You have reached a maximum limit of <strong>{limit}</strong> columns in the table. Remove at least <strong>1</strong> column to add or create another one.

Kumi Ernest

Author Tools

Chat about Author

Papers

What are small enterprises finance needs