Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Erdogan, Aysa Ipek

doi:10.1080/1331677x.2019.1578678

Cited by 19 publications

(27 citation statements)

References 89 publications

(127 reference statements)

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“…The overall mean of 3.53 implied that relationship banking increase access to financial services according to majority of the respondents. The study finding support those by Erdogan (2019) and International Trade Centre ( 2018) who argued that SMEs find it harder to access credit services because of failure to establish relationship with banks. In the same line support came from Behr et al (2017) and Banerjee, Gambacorta and Sette (2017) whose findings also proposes that lengthier relationships amid borrower and lender definitely benefits in lessen information asymmetries hence benefitting borrowers' access to financial services.…”

Section: Frequencysupporting

confidence: 86%

“…The previous studies conducted provided mixed conclusions on direct relationship between relationships lending on access to financial services. Veiga and McCahery (2019); Erdogan (2019) and ITC (2018) indicated a positive and significant relationship between relationships lending and access to financial services while Bentolila, Marcel, Gabriel and Sonia (2017), Rahman, Belas, Rosza and Kliestik (2017) and Cenni, Monferrà, Salotti, Sangiorgi & Torluccio (2015) shown positive and insignificant relationship among relationship lending and access to financial services. The inconsistencies in this studies provided a platform of research to ascertain the reliable conclusions.…”

Section: Introductionmentioning

confidence: 99%

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Relationship lending and access to financial services by SMEs in Kenya

Kiring’a

Ndede²,

Wekesa³

2021

IJRBS

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Policymakers and scholars acknowledge the significance of small and medium enterprises in stirring the economic growth and development in developing and developed economies. In spite of the generally fast pace by which access to financial services for small and medium enterprises is being established, significant segments of the small and medium enterprises sector do not yet benefit from the expansion. This study, therefore, investigated the effect of relationship lending on access to financial services by small and medium enterprises in Kenya. The study was based on credit rationing theory and information asymmetry theory. The target population comprised 4,253 small and medium enterprises in Kenya. A sample size of 366 SMEs was used by the study. The study adopted a multistage sampling technique to obtain the SME respondents. Primary data was utilized and was acquired through semi-structured questionnaires. Data were analyzed using descriptive and inferential statistics utilizing Heckman two-stage regression model. The study findings showed that relationship lending had a positive and significant effect on access to financial services among SMEs in Kenya. The study concluded that relationship lending plays a critical role in access to financial services by SMEs in Kenya. The study recommends that SMEs owners should strive to meet the terms and conditions provided by lending institutions in their various financing practices while management of the lending institutions should adopt financing practices favorable to SMEs to increase their access to financial services.

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Section: Frequencysupporting

confidence: 86%

Section: Introductionmentioning

confidence: 99%

Relationship lending and access to financial services by SMEs in Kenya

Kiring’a

Ndede²,

Wekesa³

2021

IJRBS

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“…Bowmaker-Falconer and Herrington (2020) posit that access to funding for start-ups is a global phenomenon. Only well-established older enterprises have a higher bank fundability likelihood (Erdogan 2019). The bank's assessment of the enterprise's financial performance relies Background: Small and medium enterprises (SMEs) in South Africa and globally struggle to gain access to external funding.…”

Section: Introductionmentioning

confidence: 99%

Innovative mechanisms to improve access to funding for the black-owned small and medium enterprises in South Africa

Baloyi

Khanyile

2022

SAJESBM

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Background: Small and medium enterprises (SMEs) in South Africa and globally struggle to gain access to external funding. The current lending instruments used by the banks are more suitable for large enterprises than for SMEs. Financially constrained SMEs are less likely to contribute to economic growth and job creation. Small and medium enterprises in South Africa are expected to create 90% of the 11 million jobs as per the National Development Plan.Aim: The objective of this study was to deliver innovatively designed funding mechanisms through which improved access to external funding can be achieved.Setting: Participating stakeholders in this research were entrepreneurs and suppliers of funding, policymakers and experts.Methods: The purposive sampling method was used in this study where 24 in-depth interviews were conducted, and 160 survey questionnaires were recorded. Mixed-methods approach was used to incorporate both qualitative and quantitative techniques. A literature review related to entrepreneurship and capital structure theories was conducted. Thematic and statistical graphical data analyses were applied in both the qualitative and quantitative data, respectively.Results: The critical findings of this study are the blended SME funding model and the SME risk reduction model. Designing the lending instruments in a way that blends both private and public financial resources increases the risk appetite on the side of the private lending institutions.Conclusion: The proposed model requires more improved public–private partnerships. Furthermore, the findings include the need for supportive regulatory framework and embracing alternative emerging technology-enabled funding options.

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“…Several studies have acknowledged SMEs to have immense potentials for job and wealth creation and poverty alleviation in the less developed economies (Imafidon & Itoya, 2014;Owolabi & Nasiru, 2017;Bashir & Ondigo, 2018;Erdogan, 2019). However, this goal has not been achieved in Nigeria.…”

Section: Introductionmentioning

confidence: 99%

Bank Credit Accessibility and Performance of Smes in Kwara State, Nigeria: A PLS-Sem Analysis

Sanni

Oke

Alayande

2020

CJFA

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This study examines the effect deposit money banks credit accessibility on SMEs performance in Kwara State, Nigeria. The population of the study consists of three hundred and eighty-two (382) respondents and one hundred and ninety-eight (198) were randomly selected as the sample size of the study. Data were drawn from the primary source to elicit responses from SME owners/managers. Descriptive statis-Mubaraq Sanni, Lukman Adebayo Oke, Idayat Titilayo Alayande 46 tics and Partial least square-Structural Equation Model (PLS-SEM) estimation techniques were employed to analyse the data collected. The study revealed that deposit money banks credit accessibility has a positive significant effect on SME performance (T=10.795, β=0.043) at 5% significance level and credit related charges (interest) also has a positive significant effect on SME performance (T=10.690, β =0.458). This implies that provision of finance by deposit money banks at relatively low cost play an important role in boosting the performance of SMEs. The study therefore concluded that SMEs in Kwara State are faced with the problem of access to finance as they are not fully benefiting from the credit facilities of the deposit money banks. The study therefore recommended that deposit money banks should put in place a more SME friendly credit administration system for SMEs to enable them access fund easily and affordably.

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Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Cited by 19 publications

References 89 publications

Relationship lending and access to financial services by SMEs in Kenya

Relationship lending and access to financial services by SMEs in Kenya

Innovative mechanisms to improve access to funding for the black-owned small and medium enterprises in South Africa

Bank Credit Accessibility and Performance of Smes in Kwara State, Nigeria: A PLS-Sem Analysis

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