Alleviating Financing Constraints of SMEs through Supply Chain

Yang, Yang; Chen, Xuezheng; Gu, Jing; Fujita, Hamido

doi:10.3390/su11030673

Cited by 28 publications

(16 citation statements)

References 80 publications

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“…Difficulty in accessing finance may cause SMEs to turn to inappropriate sources of finance and thus reduce their sustainability. Moreover, access to finance affects the growth and innovation of SMEs [52]. All in all, the evidence suggests that SMEs with better access to finance are better placed to sustain their performance and survive in today's competitive business environment.…”

Section: Discussion Of the Findingsmentioning

confidence: 99%

“…Shepherd et al [51] showed that access to finance was important in enabling SMEs to achieve sustainable performance goals. Access to finance improves organizations' sustainability by making market entry easier, increasing entrepreneurial activities, boosting capacity for innovation and improving risk management skills [52]. Tiwari et al [53] showed that providing small businesses with loans at concessionary interest rates increased their access to finance hence boosted their performance.…”

Section: Access To Finance and Smes' Sustainabilitymentioning

confidence: 99%

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How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

2019

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Role of the knowledge-based resources in promoting sustainability in small and medium enterprises (SMEs) is currently a topic of debate. Financial literacy has been identified as a vital knowledge resource for financial decision making, but insufficient attention has been given to how SMEs’ financial literacy affects their sustainability. Drawing upon a knowledge-based perspective, peaking order theory and dual process theory, we constructed an integrated model to examine the impact of financial literacy, access to finance and financial risk attitude on SMEs’ sustainability. The sample included 291 chief financial officers (CFOs) of SMEs in Sri Lanka. The output of structural equation modelling revealed direct positive effects of financial literacy, access to finance and financial risk attitude on sustainability. Financial literacy also emerged as a predictor of access to finance and financial risk attitude. Moreover, access to finance and financial risk attitude were found to be partial mediators of the relationship between financial literacy and SMEs’ sustainability. Theoretical implications and practical implications for policymakers, industry practitioners and academics interested in promoting sustainability amongst SMEs are discussed.

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Section: Discussion Of the Findingsmentioning

confidence: 99%

Section: Access To Finance and Smes' Sustainabilitymentioning

confidence: 99%

How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

2019

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“…Manville et al, (2019) found that supplier issues affect better SCM in UK aerospace SMEs. Yang et al (2019) reported financing constraints to be the major issue impacting the supply chain in SMEs. In Tanzania, Mollel (2015) found that information sharing and outsourcing negatively impacted SCM in food firms in Tanzania.…”

Section: Supply Chain Management (Scm)mentioning

confidence: 99%

Supply chain management constraints in Tanzanian small and medium enterprises

Nkwabi¹

2019

Afr. J. Bus. Manage.

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Supply chain management (SCM) has gained popularity around the globe due to its significance in relation to improving business performance. Although large enterprises have been able to successfully implement SCM, it is different in small and medium enterprises (SMEs) as they are faced with several constraints that hinder the effective implementation of SCM. Variables such as technological difficulties, poor coordination with the supplier's lack of government support, resources, funds, access to markets and top management support, issues in information sharing, inventory management, poor SCM knowledge and unskilled workforce all affect the SCM implementation in SMEs. These variables were measured in this study. A mixed method approach was used in this study where content analysis was employed through carrying out an extensive literature review to identify the SCM constraints. Descriptive statistics were then used to justify the relationship between SCM impediments and effective SCM implementation in Tanzanian SMEs. Frequency and percentages were computed to obtain the study results. The findings reveal that there is a significant relationship between effective SCM implementation in Tanzanian SMEs and constraints such as technological difficulties, poor coordination with suppliers, a lack of support from the top management and insufficient funds. This indicates that Tanzanian SMEs are mostly constrained by technological difficulties, poor coordination with their suppliers, a lack of support from top management and insufficient funds. The results also revealed that information sharing, inventory management, a lack of access to markets and poor SCM knowledge were insignificant constraints affecting SCM implementation in Tanzanian SMEs, thus indicating that there are no significant relationships between these constraints and SCM implementation in Tanzanian SMEs. The study recommends that support from the government in terms of financial assistance could help the SMEs to overcome the financial constraints and to invest more in recent technologies to help effectively implement SCM. Training from SME governing bodies such as the Small Industry Development Organisation (SIDO) in Tanzania could help to increase awareness of the importance of SCM. Furthermore, forming and maintaining long-term relationships with suppliers is critical for effective SCM implementation.

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“…Forkuoh et al (2015) also add that difficulty in accessing external financing results from the inability of these companies to reliably signal the ability to repay debts. Appropriate improvement in external financing for SMEs, compliant with the research results by Yang et al (2019), may bring measurable benefits for the entire supply chain and provide small and medium enterprises with long-term and sustainable development.…”

Section: The Financial Situation Of Smesmentioning

confidence: 97%

Parametric Conditions of High Financial Risk in the SME Sector

Ślusarczyk

Grondys

2019

Risks

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The sector of SME is the major force for the national economic and social development. Financial risk is one of the key threats to the activity of small and medium enterprises. The most common manifestation of the financial risk of SMEs is difficulty in financing the business and lack of funds for development. Banks are unwilling to grant loans to such companies. Moreover, it is the rising operating costs that cause shrinking profits, which may result in corporate debt, difficulty in debt repayment, and consequently, high financial risk of these entities. Numerous differences in conducting the activity of small and large enterprises intensify this risk and mean that the model of credit financing for companies is not adjusted to the capabilities and principles of the operation of small enterprises. Therefore, risk management is one of the most important internal processes in small and medium enterprises. The identification of factors that affect the level of financial risk in these entities is therefore crucial. The main objective of this research was to analyze the impact of selected parametric characteristics of the SME sector on the intensity of financial risk they take. This objective was accomplished on the basis of the survey with the participation of Polish SMEs. In order to test the adopted research assumptions, the linear regression model was used with four continuous variables for each type of the identified financial risk. Based on the final research results, the logit model was obtained for the risk of insufficient profits. It was indicated that both the internationalization of the company and the ability to manage risk are the only factors that affect a high level of risk of low income. The article ends with the discussion and the comparison with some previous research in this area.

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Alleviating Financing Constraints of SMEs through Supply Chain

Cited by 28 publications

References 80 publications

How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

Supply chain management constraints in Tanzanian small and medium enterprises

Parametric Conditions of High Financial Risk in the SME Sector

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