Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs)
Previous literature indicates that small and medium enterprises (SMEs) experience problems securing funds from banks to development their businesses.Although SMEs are the backbone of every country and play a significant role in economic development, banks still appear reluctant to approve loans, esp...
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| Format: | Article |
| Language: | English |
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Engineering and Technology Publishing
2013
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| Online Access: | https://repo.uum.edu.my/id/eprint/15393/1/2013102.pdf |
| _version_ | 1803626967872831488 |
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| author | Zainol, Zairani Zainal Affrin, Zaimah |
| author_facet | Zainol, Zairani Zainal Affrin, Zaimah |
| author_sort | Zainol, Zairani |
| collection | UUM |
| description | Previous literature indicates that small and medium enterprises (SMEs) experience problems securing funds from banks to development their businesses.Although SMEs are the backbone of every country and play a significant role in economic development, banks still appear reluctant to approve loans, especially to micro businesses. This situation has resulted in some SMEs turning to illegal money lenders/loan sharks or “Ah Long”, because this is the fastest and easiest way of obtaining finance.Nevertheless, banks must consider several factors before they can approve a loan to SMEs because the credit risk associated with such a loan is high. The aims of this paper are to (i) explain the problems that banks face with loan applications by SMEs and (ii) examine the factors involved in obtaining loans from banks. The study employed a qualitative research approach, with officials from five banks in Malaysia interviewed about problems they faced with loan applications from SMEs.The paper attempts to contribute theoretically and practically to the literature on SMEs and provide information for SMEs on the factors that must be considered when dealing with banks. |
| first_indexed | 2024-07-04T05:58:35Z |
| format | Article |
| id | uum-15393 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T05:58:35Z |
| publishDate | 2013 |
| publisher | Engineering and Technology Publishing |
| record_format | dspace |
| spelling | uum-153932016-04-19T04:03:02Z https://repo.uum.edu.my/id/eprint/15393/ Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) Zainol, Zairani Zainal Affrin, Zaimah HB Economic Theory Previous literature indicates that small and medium enterprises (SMEs) experience problems securing funds from banks to development their businesses.Although SMEs are the backbone of every country and play a significant role in economic development, banks still appear reluctant to approve loans, especially to micro businesses. This situation has resulted in some SMEs turning to illegal money lenders/loan sharks or “Ah Long”, because this is the fastest and easiest way of obtaining finance.Nevertheless, banks must consider several factors before they can approve a loan to SMEs because the credit risk associated with such a loan is high. The aims of this paper are to (i) explain the problems that banks face with loan applications by SMEs and (ii) examine the factors involved in obtaining loans from banks. The study employed a qualitative research approach, with officials from five banks in Malaysia interviewed about problems they faced with loan applications from SMEs.The paper attempts to contribute theoretically and practically to the literature on SMEs and provide information for SMEs on the factors that must be considered when dealing with banks. Engineering and Technology Publishing 2013-12 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/15393/1/2013102.pdf Zainol, Zairani and Zainal Affrin, Zaimah (2013) Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs). Journal of Advanced Management Science, 1 (4). pp. 354-357. ISSN 21680787 http://doi.org/10.12720/joams.1.4.354-357 doi:10.12720/joams.1.4.354-357 doi:10.12720/joams.1.4.354-357 |
| spellingShingle | HB Economic Theory Zainol, Zairani Zainal Affrin, Zaimah Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title | Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title_full | Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title_fullStr | Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title_full_unstemmed | Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title_short | Difficulties in securing funding from banks: Success factors for Small and Medium Enterprises (SMEs) |
| title_sort | difficulties in securing funding from banks success factors for small and medium enterprises smes |
| topic | HB Economic Theory |
| url | https://repo.uum.edu.my/id/eprint/15393/1/2013102.pdf |
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