Write a Literature review of 1000 words that cover the topic
of (study of SMEs and their access to finance)…
objective of this proposal is to:
Therefore, the objective of this paper is to identify main barriers
that prevent SMEs from accessing to sufficient finance:
The first obstacle that lenders considered in investing money in
high return and lower risks operations instead of lending small scale
activities. Lenders are slow to evaluate small and medium business borrowers
where they often appeals to them as unreliable, unprofitable, and risky.
SMEs may struggle to provide lenders with collateral of specific.wikipedia.org/wiki/Property” title=”Property”>property to.wikipedia.org/wiki/Secured_loan” title=”Secured loan”>secure the repayment of a loan which considered as a major issue.
The second obstacle is that most of SMEs have a lack of loan
securitization and information of asymmetry. Lenders need information
of asymmetry and Intensive scrutiny of the business financial performance in
making lending decisions to ensure the repayment.
Thirdly, most of small and medium enterprises suffer of the poor
financial management which contributes in loan denial. The poor financial
management has been affected by the quality of the SMEs work,
productivity, profitability and their performance. Thus, SMEs are evolving in a
poor position that cannot give the lenders the minimum information they
generally required such as financial statements and legal document.
As far as lenders prefer to lend money for a high returns, they
concerned on small and medium business locations which consider
as the last barrier that must target a high economic area. Location is
important to a business as it helps to get access to more customers and gaining
more profit. In addition, SMEs stand out as high-risk clients for lenders due
to the lack of business skills, experience, location strategies and resources.
Please find articles or books that related to this topic
and objectives ..