A Study of Financing Issues in Small Medium Enterprises

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ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends & family for support they provided & their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

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ABSTRACT

This dissertation provides insight into the financing issues in small and medium enterprises (SMEs) and how these issues affect their performance. The importance of SMEs and their structuring role in the economy in developing countries has been extensively studied in the past years. Several authors have studied specifically SME financing. As innovative practices in SME financing currently multiply, most notably with the help of the growing alternative lending industry, there have been surprisingly few academic efforts to update and assess the financing situation of SMEs. The main objective of the study is to evaluate SMEs access to financing and assess the recent efforts of the alternative lending industry to better serve these groups financially. This dissertation aims to provide better understanding of SMEs, their financing needs and challenges as well as recent financial innovations in the field by reviewing publications on the issue, and to provide a brief evaluation of financial innovations and their impact on financing needs of SMEs. This study answers the research questions by reviewing the relevant literature that will be great contribution to existing literature. The research provide some insights on some of the current financing challenges facing by SMEs and point to some possible solutions. Finance has demonstrated itself as a key factor in determining the success of SMEs and their members. In order for SMEs to successfully market their products, it is essential for them to have the sufficient liquidity to satisfy several key financing needs, both at the organization and individual member levels. This research is founded on the secondary data. The research encompasses the publications, articles and similar studies accessible on the internet. Keeping in view the approach taken in earlier studies the research began with a broad analysis of the existing literature. The findings & conclusions are based on the secondary data.

Table Of Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 01: INTRODUCTOIN1

Background of the Study1

Research Objectives1

Research Questions2

Justification of the Chosen Topic2

CHAPTER 02: LITERATURE REVIEW3

Definitions of the Small Medium Enterprise3

Characteristics of Small Medium Enterprise4

Economic and Technical Services Provides by Small Medium Enterprise6

Different Methods of SME Financing8

Supply Chain Financing9

Sustainable Trade Guarantee Fund10

Capacity Building and Coaching in Financial Management11

The Sme Internalizes Credit12

Financing Issues and Problems of SMEs12

Lack of SME Specific Finance15

Demand Side Issues17

Developments in SME financing20

Importance of SMEs in Economic Development22

Buyer Consolidation and Concentration23

Specialize, Diversify and Better Market Their Products27

Drawbacks of Rural Financial Systems28

SME's Sister Financial Institution32

The Rise of Alternative Lending34

CHAPTER 03: RESEARCH METHODOLOGY39

Research Methods39

Qualitative Research ...