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Smes' Sector Access To Finance: An Overview

Author

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  • Roman Angela

    ("Alexandru Ioan Cuza" University Iași, Romania, Faculty of Economics and Business Administration)

Abstract

Through their contribution to the creation of added value and new jobs, the small and medium enterprises (SMEs) have a significant role in the economic and social development of a country. However, these enterprises are facing numerous obstacles that limit their performance, growth and development. Among the difficulties faced by SMEs, the access to finance is often reported as a major obstacle to the deployment and expansion of their activity. The access to finance is crucial for efficient allocation of financial resources and entrepreneurial development, which explains the major interest given to this subject both by the academic literature and the policy makers. The paper aims to highlight the difficulties faced by SMEs in securing financing resources, emphasizing the differences between countries and also between SMEs and large enterprises. Knowing the difficulties in SMEs financing is essential for policy makers in order to design and implement appropriate measures, which will help to improve the access to financing for these enterprises. Thus, another issue addressed, synthetically, in this paper aims the measures taken by public authorities in order to support the access to financing for SMEs. The research methodology used in this paper starts with a literature review in order to highlight the importance of the subject addressed in our research. The analysis conducted in this paper is based on data and statistics provided mainly by the World Bank surveys, by certain empirical studies and by the National Council of Small and Medium Sized Private Enterprises in Romania. Based on the methodology used, the paper indicates the difficulties in SMEs financing and the crucial importance of enhancing the public authorities concerns regarding their alleviation, especially by adopting measures focused on increasing financial development, which would ensure greater availability of financing for businesses and thus economic growth. The limited availability and even lack of statistical data regarding the SMEs financing situation from various countries, including Romania, impose certain limits to the researches in the field, which can be overcome as policy makers realize the vital importance of developing and monitoring specific indicators regarding the financing of this type of enterprises, such as the share of loans granted to SMEs, based on their size, experience and sectors of activity, that would be useful for public authorities, creditors and investors.

Suggested Citation

  • Roman Angela, 2011. "Smes' Sector Access To Finance: An Overview," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 431-437, July.
    • Handle: RePEc:ora:journl:v:1:y:2011:i:1:p:431-437
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    File URL: http://anale.steconomiceuoradea.ro/volume/2011/n1/037.pdf
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    References listed on IDEAS

    as
    1. Ardic, Oya Pinar & Mylenko, Nataliya & Saltane, Valentina, 2011. "Small and medium enterprises : a cross-country analysis with a new data set," Policy Research Working Paper Series 5538, The World Bank.
    2. Abhijit V. Banerjee & Esther Duflo, 2014. "Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed Lending Program," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 572-607.
    3. Beck, Thorsten & Demirguc-Kunt, Asli, 2006. "Small and medium-size enterprises: Access to finance as a growth constraint," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2931-2943, November.
    4. Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2008. "How Important Are Financing Constraints? The Role of Finance in the Business Environment," The World Bank Economic Review, World Bank, vol. 22(3), pages 483-516, November.
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    Cited by:

    1. Abidemi C. Adegboye & Samuel Iweriebor, 2018. "Does Access to Finance Enhance SME Innovation and Productivity in Nigeria? Evidence from the World Bank Enterprise Survey," African Development Review, African Development Bank, vol. 30(4), pages 449-461, December.

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    More about this item

    Keywords

    Key words: Small and Medium Enterprises; access to finance; financing constraints; bank financing; support measures;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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