Determinants and impact of bank financing on the economic and non-economic performance of SMEs in Bangladesh
Small and Medium Enterprises (SMEs) are seen as the most important drivers of country economic. Lack of capital will affect the contributions of SMEs to economic development. Thereby, bank financing may help SMEs in getting more funds to expand their business. However, some SMEs do not believe th...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2020
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/99108/1/NAFIZA%20AKTHER%20-%20IR.pdf http://psasir.upm.edu.my/id/eprint/99108/ |
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| Summary: | Small and Medium Enterprises (SMEs) are seen as the most important drivers of country
economic. Lack of capital will affect the contributions of SMEs to economic
development. Thereby, bank financing may help SMEs in getting more funds to expand
their business. However, some SMEs do not believe that this type of financing can help
to improve their businesses. Hence, this study aims to identify the determinant factors of
SMEs‟ bank financing. This study also examines the impact of bank financing on SMEs'
economic and non-economic performances in Bangladesh.
In pursuit of these objectives, this study adopts a quantitative method by distributing 403
questionnaires to the SMEs in Bangladesh. The data are collected explicitly from the
owners and managers based on the availability and easy access to the SMEs. In doing
so, this study uses a non-probability sampling technique. Besides, the Statistical Package
for the Social Sciences (SPSS) is used to run the analysis. Furthermore, the Pecking
Order Theory and Agency Theory are applied to support the study's proposed
relationships between variables and hypotheses.
The results of this study show that all the hypotheses are supported. The first seven
hypotheses are developed under hypothesis one, revealing a significant relationship
between determinants and bank financing. It indicates that SMEs take into account both
internal and external factors during decisions on bank financing. Moreover, the results
of hypotheses two and three are also supported and reveal that bank financing has a
positive impact on SMEs' economic and non-economic performances in Bangladesh.
The study has significant theoretical and contextual contributions and implications on
the banks' governing authorities, the central bank's financial policymakers, and SMEs.
Conclusively, the findings also provide a series of guidelines to the SMEs in Bangladesh
regarding on the determinant factors and considerations for availing bank financing. |
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