A Report on Sme Financing in India

par. 3). Start-up capital plays a vital role in putting up a business. How are the owners will operate the business without the finances? How are they going to pay all the expenses like salaries, taxes and materials they need for the business without the money? There are several ways on how to finance the business. Canada Business Network (n.d.) enumerates these ways like government grants, private sector financing, financing from non-government organization, equity financing and personal assets (par. 1). In Canada, there is a government owned financial institution that supports the finances of small businesses which is called The Business Development Bank of Canada (Williamson, 2008, p. 33). Most small business owners do not realize that there are several pathways to finance their businesses that’s why they end up frustrated and unsuccessful. It would be beneficial for the small business owner to know that there are resources available for

SMEs play an essential role in the Singapore economy as they account for more than 50% of the economic growth and 70% of employment. The government has introduced various schemes and programs for SMEs to constantly improve their technology and infrastructure so as to sustain and generate higher economic growth.

Grameen Bank provides various services that benefit not just a group of people but the impoverished people in the whole world, starting from Bangladesh and spreading across to every part of the world where underprivileged people live. Speaking exclusively about the services of Grameen Bank, the organization specializes in providing small loans to impoverished farmers and other small startup entrepreneurs in Bangladesh and beyond without requesting collateral from loan recipients. That is apparently why the bank is popularly called ‘the bank of small business’ and their motto is ‘banking for the Poor’ (Grameen Bank, n.d.). Through its services, many communities have flourished and various startup ventures are

For Singapore, peer to peer lending is still considered as a new and developing sector. Singapore economy mainly consists of Small and Medium Sized Enterprises (SME), whereby most new start-up SMEs face problems in getting loan from bank or financial institutions due to lack of goodwill. This means, peer to peer lending in Singapore bridges the SMEs gap of getting loans for business development. This research mainly focuses on the future of Peer to peer lending in Singapore that is useful to have a practical insight of Peer to peer lending and its implications in Singapore.

Jensen and Meckling (1976)’s work indicated that financial statements of the firms helped not only in informed decision making, but mitigated the issue of information asymmetry for banks in assessing firm risk (Drever, Stanton & McGowan 2007; Michaelas, Chittenden & Poutziouris 1999). Kira and He's (2012) work on Tanzanian SMEs revealed that it was easier for larger firms and corporations with publicly declared financial statements to access debt financing than SMEs. SMEs are not under any legal obligation to produce and share any verifiable information with the public. Drever, Stanton and McGowan (2007) argued that even when SMEs maintained financial reports; it was mainly produced in relation to tax reporting or for other non-securities regulatory filing purposes and not to be shared in the financial

Microfinance is a complex but important issue for both the average person, and the financial sector to understand. While the financial instruments used may be similar, the demographics of the users of microfinance is important to understand. The main purpose of the paper is to give the reader a better understanding of microfinance and provide a researched opinion on the overall impact of the practice.

Presently, the economic atmosphere is not optimal, nonetheless, the EU has attempted to try to find solutions in dealing with these problems. In Europe, banks play the important role of financing both households and small and medium sized enterprises (SME). In summary, the biggest problem area has been the euro banking sector, which has reduced not only financial activity, but numbers of banks. Within the euro sector, the most troubled area has been twofold: (1) loans to businesses and (2) inter-bank lending. This has been labeled “Eurozone crisis.” On the other hand, non-euro banks are doing much better. As a result, there has been increased regulation from the EU financial services division to offer better controls. Therefore, banks are struggling to keep afloat with new

Small loan companies are facing "the degree of competition with industry rivals" is a most important competitive factor. This is because we can see from the above analysis, this article will be "from banks, small loan companies, etc. to obtain the loan," as a kind of unity and means of financing, which means you can operate lending institutions are "the competitors', while the number of competitors within the industry and size are very large.

Global GDP growth is set to remain steady at 3% for the fifth consecutive year in 2016.1 However, the low-income population often gets neglected in this growth story. Around 2 billion people lack access to even a savings account and more than 200 million micro, small and medium-sized enterprises (MSME) lack access to adequate financing; these numbers highlight the extent of financial exclusion.2 Banks seem to have taken note of these realities and are adopting new technologies and leveraging partners to tap the underserved. This has resulted in increased financial inclusion in rural areas, especially among those who are opening bank accounts for the first time. Still, despite the best efforts of banks, many are yet to be included in the

Most of these companies’ assets are in the form of current assets. Also, current liabilities are one of their main sources of external finance because they encounter difficulties in obtaining funding in the long-term capital markets (Petersen and Rajan, 1997) and the financing constraints that they face (Whited, 1992; Fazzari and Petersen, 1993). In this respect, Elliehausen and Wolken (1993), Petersen and Rajan (1997) and Danielson and Scott (2000) show that small and medium-sized US firms use vendor financing when they have run out of debt. Thus, efficient working capital management is particularly important for smaller companies (Peel and Wilson, 1996). In this context, the objective of the current work is to provide empirical evidence about the effects of working capital management on profitability for a panel made up of 8,872 small to medium-sized enterprises (SMEs) during the period 1996 to 2002. This work contributes to the literature in two ways. First, no such evidence exists for the case of SMEs in earlier studies. A sample of Spanish SMEs was studied that operate within the so-called continental model, which is characterized by its less developed capital markets (La Porta et al., 1997), and by the fact that most resources are channeled through financial intermediaries ´ (Pampillon, 2000). All this suggests that Spanish SMEs have fewer alternative sources of external finance available,

The various loans available in the market can be broadly classified into the following categories:

SMEs are considered the engine of economic growth in both developed and developing countries, as they:

Within the segment, small enterprises led the demand for financing: around Indian rupees 6.42 trillion ($116 billion), approximately 74 percent of the total requirement. This was mostly due to unmet working capital and investment finance needs. Micro enterprises with a requirement of Indian rupees 2.05 trillion ($37 billion), accounted for 24 percent. Most of this requirement was largely focused around working capital needs. Women-owned medium-scale enterprises, which account for 0.01 percent of the total MSME sector had finance requirements of around Indian rupees 0.21 trillion ($4 billion), about 2 percent of the total requirement. Microfinance loans for seed capital allow women borrowers build credit habits and become more bankable. Thus, microfinance plays a key role in expanding access to finance for low-income women aspiring

The idea of microfinance business was pioneered in 1970s by Prof. Yunus in Bangladesh, later on followed by countries such as Bolivia, Indonesia and others. The idea was to setup a financial inclusion system which can benefit the poor and to prove that the poor can be creditworthy and can run productive microenterprises if adequate and applicable system is designed (Callaghan et al. 2007). As a result, microfinance innovation spread to different countries in the world and strongly targeted as tool of poverty alleviation and development priority to empower the poor. The industry has registered a tremendous growth since its emancipation, now it is an industry of more than 10,000 microfinance institutions which mobilize around US$70 billion assets and serves about 150 million customers around the world (Augustine, 2012).

This chapter seeks to review available literature on microfinance, the Small and Medium Enterprises (SMEs) and Rural Banking in Ghana. It lays much emphasis on the research questions and objectives of this study.