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Determinants of Bank Involvement with SMEs by Victor U. Ekpu Pdf
This book is a comprehensive, yet concise text that brings together all aspects of SME banking theories and empirical studies in one text. The book contains the latest policy debates on money creation and credit rationing and the relative role of demand-side and supply-side factors affecting SME financing. Readers will understand the borrower-specific, lender-specific and business environment drivers of bank finance for SMEs as well as the determinants of loan contract terms, particularly the risk premium and collateral. Readers will also understand how loan officers acquire proprietary information on SMEs and apply various lending techniques, such as financial statement lending, relationship lending and credit scoring to the loan underwriting process. In addition, the book also features recent trends on the rise of alternative finance intermediaries such as online peer-to-peer lenders and the competitive implications for traditional banks providing loans to SMEs. Findings from this work will thus be of particular interest to commercial bankers, bank-dependent small business borrowers as well as policy makers, and researchers in central banks, development banks, development agencies and international financial institutions.
Access to Bank Credit and SME Financing by Stefania Rossi Pdf
This book explores how the global financial and European sovereign debt crises have forced small-and-medium-sized businesses (SMEs) to reassess and adapt their funding strategies. At the heart of the matter is the worsening access to bank credit for such enterprises. Through this discussion we learn how crucial an understanding of SME-financing is to policy makers, in light of the fact that SMEs dominate the business landscape in Europe and are the main drivers of employment, growth and innovation in the European economy. Contributing chapters present expert analysis and investigate many topics including the problems faced by SMEs in accessing bank credit and the cost of funding and its determinants. Particular attention is also given to how credit-constrained enterprises may reformulate their funding strategies by employing alternative, non-bank, financial resources, and how regulators could support SMEs in broadening and improving their funding opportunities.
Financial Markets, SME Financing and Emerging Economies by Giusy Chesini,Elisa Giaretta,Andrea Paltrinieri Pdf
This book investigates small and medium sized enterprises (SMEs) access to credit, the earning quality, and the cost of debt in the European Union. It also examines two important risk measures in financial markets: the volatility index (VIX) and Credit Default Swaps (CDS). Finally, it deep dives inside one of the most important emerging markets, China, to assess monetary policy and the relationship between financial institutions and real estate firms. This work will appeal to both academics and practitioners in the areas of SME financing, financial markets and emerging economies.
Utilization of Soft Information on Bank Performance by Tadanori Yosano,Takayoshi Nakaoka Pdf
This book explores the effects of soft information utilization in the decision process for lenders, especially concerning small and medium-sized enterprises (SMEs) in regional markets. This study is one of the first to use questionnaire survey data from lender representatives, and analyzes the relationship between the financial metrics of a lender’s performance and soft information factors in inter-bank competition. The authors’ empirical results suggest that utilizing soft information allows banks to attain a more precise lending decision. The Financial Services Agency in Japan introduced an action program in 2003 that requires regional banks to shift from transaction banking to relationship lending. Against that background, this book examines the influence of relationship lending on a lender’s performance. This study found that relationship lending allows lenders to charge a higher premium to counteract the high risk involved with SMEs. The book also examines how relationship lending affects lending performance in inter-bank competition. The conclusion is that, even though inter-bank competition has negative effects, a bank in a competitive local market can acquire an informational advantage to limit its own loss. This book categorizes three soft information factors: organizational systems, networks or alliances/partnerships, and business/management leadership based on survey data. The authors’ findings suggest that information production, especially network and business/leadership information, plays an essential role in promoting a bank’s profitability. These effects are strong even when banks face high inter-bank competition. Relationship lending not only improves bankers’ lending techniques, but also fosters and enhances their community knowledge and enables them to survive in a highly competitive market.
Financial Determinants of SME Activity in Developing Countries by Piotr Łasak Pdf
PURPOSE: The traditional sources of financing (bank loans) cannot be treated as an essential source of financing for SMEs in developing countries. For this reason, this group of entities uses many alternative sources, from bootstrapping to microfinance and crowdfunding. During the last decade, a significant contribution in this area has been done by financial technology. The purpose of this study is threefold: 1) to present the role of financial technologies in financing SMEs, 2) to examine the role of entities based on financial technology in financing SMEs in developing countries, and 3) to consider other non-bank aspects of financing SMEs, leading to the improvement of the financial situation of these entities. The in-depth analysis of these entrepreneurial finance practices will be developed in the following papers presented in this Issue. METHODOLOGY: This study employs a theoretical approach based on a narrative literature review. The primary attention is focused on applying financial technology as a stimulant for the finance of SMEs in developing countries. FINDINGS: As a consequence of the financing gap for SMEs within the traditional financial system, these entities use non-bank financing based on financial technology. The research confirms that financial technology plays a crucial role in fostering the financial situation of SMEs in developing countries and providing greater financial inclusion for these entities. Both, financial technology and enterprises based on this technology contribute significantly to the improvement of efficiency of financing SMEs in emerging markets. They also provide a broader range of services, than were offered by the traditional financial sector. Regarding the other aspects of SME finance, it is essential to implement such ways of financing like microfinance services and crowdfunding. Such funding mechanisms, together with the budget process and the compliance under the conditions of e-tax systems, are important determinants of current entrepreneurial finance. IMPLICATIONS: The paper describes the financing of SMEs in developing countries. The in-depth picture of the SME’s financial situation, focusing on the technological development in this area, provides essential insight into this still poorly explored area. It also offers important premises for shaping the post-pandemic policy to support their further growth. ORIGINALITY/VALUE: Despite growing theoretical and empirical literature about entrepreneurial finance, this study aims to contribute to the role of financial technology in this area. The impact of financial technologies and the role of fintech-based entities on SME activity in developing countries are still poorly researched. Moreover, the research provides a brief overview of other SME funding sources and their determinants in this group of countries.
Reforming Rules and Regulations by Vivek Ghosal Pdf
"In recent years governments have paid increasing attention to weighing the socioeconomic benefits of regulations against their costs. Rules and regulations governing economic activity are typically formulated with a view to their benefits. Their effects on the costs and inefficiencies, in particular the possible chilling effects on competition and innovation, have received limited attention. In this collection, experts from Europe, the United States, and Asia examine a range of issues related to the effect of rules and regulations on competition, and explore the role of key institutions that affect market outcomes. Their contributions argue for using quantitative methods to guide policy and reform rules and regulation, and many of the essays offer methodologies for assessment and recommendations for policy alternatives."--Publisher's website.
Commercial banks in economic development of SMEs. An analysis of their contribution by Hitiyise Samuel Pdf
Bachelor Thesis from the year 2021 in the subject Business economics - Investment and Finance, grade: second class upper division, , course: Accounting, language: English, abstract: The study was guided by analyzing the contribution of commercial banks in economic development of SMEs The target population for the study consisted of registered SMEs in KCBR as their clients.A descriptive research design as well as an explanatory research design was used. The study used Bouchard formula to sample SMEs and then used random sampling to select the 105 SMEs. The respondents of the study were the owners and managers of the SMEs. The study used questionnaires to collect quantitative data using closed ended questions . Data analysis will be done using SPSS statistical software version 21. Descriptive statistics (Frequencies, Means and Standard deviation) and inferential statistics (Correlations and regression) were used in analysis. A multiple linear regression model was used for analysis and all tests were conducted at 5% level of significance. The study findings indicated that banking services are positively related with economic development of SMEs. The study concluded that commercial banks in Nyarugenge district are favorable. The study also concluded commercial bank services are effective and they economic development of SMEs significantly. SMEs in Rwanda suffer from weak financial performance and a high failure rate. Scholars argue that judging by the poor economic development of the informal sector, not much progress seems to have been achieved, despite government efforts to promote SME activity. Some of the key factors attributed to this poor performance is access to financial services. Therefore, the purpose of this study was to examine the contribution of commercial banks in economic development of SMEs Normally, SMES play vital and significant contributors to economic development through their critical role in providing job opportunities and reducing poverty levels, an estimated number of up to 40% of the start-ups SMEs fail by year 2 and at least 60% close their doors by year 4. This menace is attributed to poor financial management among small businesses. Accessing credit is a major constraint to the economic development and growth of SMEs and also to poor rural and urban households. This is mainly due to the behavior of lenders in terms of hedging against borrowers’ risks by demanding collateral, which they lack, and also information asymmetry.
Unlocking Access to Finance for SMEs: A Cross-Country Analysis by Mr.Armand Fouejieu,Anta Ndoye,Tetyana Sydorenko Pdf
Countries in the MENAP and CCA regions have the lowest levels of financial inclusion of small and medium enterprises (SMEs) in the world. The paper provides empirical evidence on the drivers of SME access to finance for a large sample of countries, and identifies key policy priorities for these two regions: economic and institutional stability, competition, public sector size and government effectiveness, credit information infrastructure (e.g., credit registries), the business environment (e.g., legal frameworks for contract enforcement), and financial supervisory and regulatory capacity. The analysis also shows that improving credit information, economic competition, the business environment along with economic development and better governance would help close the SME financial inclusion gap between MENAP and CCA regions and the best performers. The paper concludes on the need to adopt holistic policy strategies that take into account the full range of macro and institutional requirements and reforms, and prioritize these reforms in accordance with each country’s specific characteristics.
Resourcing Small and Medium Sized Enterprises by Ciarán Mac an Bhaird Pdf
In a world of increasing financial uncertainty and growing unemployment, the macroeconomic contribution of SMEs is more important than ever. Development of a vibrant, sustainable small firm sector is dependent on sufficient resourcing of SMEs, particularly adequate capitalisation. This book provides a timely examination of SME financing and determinants of capital structure. A special feature of this book is the novel methodological approach adopted, providing an innovative perspective on SME financing. Analysis of stated financing preferences and objectives of SME owners is combined with results of statistical analysis of firm characteristics in exploring holistic explanations for observed capital structures. The uniqueness of this approach is in the contribution of data on financing preferences to supplement and contextualise results of bivariate and multivariate statistical tests. This methodology extends the SME literature, and is of interest to academics, researchers, practitioners and policy makers.
Contemporary Issues in Financial Institutions and Markets by Barbara Casu,Daniela Fabbri,John O.S. Wilson Pdf
The aim of this book is to bring academic work on contemporary issues in financial institutions and markets. The general theme is designed to allow for a wide range of topics covering the diverse nature of academic research in banking and finance. As a consequence the contributions cover a wide range of issues across a broad spectrum, including: bank business models, bank competition and stability, credit card pricing and risk; bank supervision; and international investments. This book was originally published as a special issue of The European Journal of Finance.
Handbook of Globalisation and Development by Kenneth A. Reinert Pdf
Characterised by conceptual diversity, the Handbook of Globalisation and Development presents contributions from prominent international researchers on all aspects of globalisation and carefully considers their role across a whole host of development processes. The Handbook is structured around seven key areas: international trade, international production, international finance, migration, foreign aid, a broader view, and challenges. Adopting a multi-disciplinary approach, the section on ‘a broader view’ delves into dimensions of globalisation and development that go beyond the mere economic, such as: culture, technology, health, and poverty. Carefully crafted, the chapters herein offer a rigorous and comprehensive assessment of the available research to date and provide an assessment of policy options across all areas considered.
Author : Chokey Wangmo,Sardar M. N. Islam Publisher : Unknown Page : 0 pages File Size : 44,6 Mb Release : 2021 Category : Small business ISBN : 1685070639
SME Finance: by Chokey Wangmo,Sardar M. N. Islam Pdf
Introduction -- Bhutan - Business, Finance and SME -- SME Finance: Issues and Theories -- Research Design and Methodology:Theoretical Framework -- Descriptive Statistics of SMEs -- Data Analysis: Phase I Quantitative Method -- Data Analysis: Phase II Qualitative Method -- Discussion, Recommendation and Conclusion.
Credit Rating and Bank-Firm Relationships by Michele Modina Pdf
This book explores the role of the rating system in creditworthiness assessment, looking into its current status, strengths and weaknesses and possible evolution in the light of Basel 3 and the Global Economic Crisis.
