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Small and medium enterprises: Asymmetric information and critical factors affecting bank financing

Small and Medium Enterprises (SMEs) are backbone of both developed and developing economies. They form substantial number of total businesses, contribute to Gross Domestic Production (GDP) and employment. In spite of the significant role played by SMEs in economic development and growth this sector...

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Main Authors: Nizamani, F., Marimuthu, M.
Format: Article
Published: American Scientific Publishers 2015
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-84946016626&doi=10.1166%2fasl.2015.6119&partnerID=40&md5=1cf10276a2f72109148f4bd1840cc8da
http://eprints.utp.edu.my/26067/
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spelling my.utp.eprints.260672021-08-30T08:51:16Z Small and medium enterprises: Asymmetric information and critical factors affecting bank financing Nizamani, F. Marimuthu, M. Small and Medium Enterprises (SMEs) are backbone of both developed and developing economies. They form substantial number of total businesses, contribute to Gross Domestic Production (GDP) and employment. In spite of the significant role played by SMEs in economic development and growth this sector of economy faces problems in the business start-up, growth and survival. The most critical problem they face is access to finance from financial institutions. SMEs argue that supply of finance is not made available to them; whereas financial institutions say loans for SMEs remain on the lower side due to demands being unqualified i.e., loan applications are not meeting the requisite criteria. This research will focus SMEs on both their supply and demand side perspectives. This paper explains the criteria set by financial institutions and there will be cross referral from the demand side perspective. The central concern of this concept paper is to capture the types of asymmetric information that exists between the borrowers and suppliers of funds and eventually to model the financial fundamentals and non-financial aspects that affect loan approval. This study will help SMEs to be better prepared so as to meet lenders� requirements for ultimate fulfillment of their financing needs through borrowing. © 2015 American Scientific Publishers. All rights reserved. American Scientific Publishers 2015 Article NonPeerReviewed https://www.scopus.com/inward/record.uri?eid=2-s2.0-84946016626&doi=10.1166%2fasl.2015.6119&partnerID=40&md5=1cf10276a2f72109148f4bd1840cc8da Nizamani, F. and Marimuthu, M. (2015) Small and medium enterprises: Asymmetric information and critical factors affecting bank financing. Advanced Science Letters, 21 (5). pp. 1615-1618. http://eprints.utp.edu.my/26067/
institution Universiti Teknologi Petronas
building UTP Resource Centre
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Petronas
content_source UTP Institutional Repository
url_provider http://eprints.utp.edu.my/
description Small and Medium Enterprises (SMEs) are backbone of both developed and developing economies. They form substantial number of total businesses, contribute to Gross Domestic Production (GDP) and employment. In spite of the significant role played by SMEs in economic development and growth this sector of economy faces problems in the business start-up, growth and survival. The most critical problem they face is access to finance from financial institutions. SMEs argue that supply of finance is not made available to them; whereas financial institutions say loans for SMEs remain on the lower side due to demands being unqualified i.e., loan applications are not meeting the requisite criteria. This research will focus SMEs on both their supply and demand side perspectives. This paper explains the criteria set by financial institutions and there will be cross referral from the demand side perspective. The central concern of this concept paper is to capture the types of asymmetric information that exists between the borrowers and suppliers of funds and eventually to model the financial fundamentals and non-financial aspects that affect loan approval. This study will help SMEs to be better prepared so as to meet lenders� requirements for ultimate fulfillment of their financing needs through borrowing. © 2015 American Scientific Publishers. All rights reserved.
format Article
author Nizamani, F.
Marimuthu, M.
spellingShingle Nizamani, F.
Marimuthu, M.
Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
author_facet Nizamani, F.
Marimuthu, M.
author_sort Nizamani, F.
title Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
title_short Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
title_full Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
title_fullStr Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
title_full_unstemmed Small and medium enterprises: Asymmetric information and critical factors affecting bank financing
title_sort small and medium enterprises: asymmetric information and critical factors affecting bank financing
publisher American Scientific Publishers
publishDate 2015
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-84946016626&doi=10.1166%2fasl.2015.6119&partnerID=40&md5=1cf10276a2f72109148f4bd1840cc8da
http://eprints.utp.edu.my/26067/
_version_ 1738656819022135296
score 13.211869

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