scholarly journals Role of Financial Innovation in Enhancing MSMES Access to Credit: An Empirical Investigation on Tanzania

2020 ◽  
Vol 7 (3) ◽  
pp. 126
Author(s):  
Wilfred E. Mbowe ◽  
Fredrick R. Shirima ◽  
Deogratius Kimolo
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Process Time ◽  
Management Skills ◽  
Loan Repayment ◽  
Record Keeping ◽  
Access To Credit ◽  
Lending Rates ◽  
Loan Size ◽  
Medium Enterprises

This study assesses the extent to which financial innovations contribute to improving micro small and medium enterprises (MSMEs) access to credit in Tanzania. Information was collected through interviews using a structured questionnaire administered on a sample of 318 respondents. Probit estimates were used for robustness check of the factors that influence MSMEs borrowing behavior.The findings indicate that factors, which influence MSMEs to borrow money through innovative channels, comprise the need for meeting business start-up, operational and expansion costs. Other factors are in respect of ease of access; convenience; short loan process; and a relatively high degree of control of the loan process by the borrower. In contrast to progress made in improving access to financial services by MSMEs, loan access by individuals or businesses through innovative platforms is still low. Only 28.8 percent acknowledged having received loans through innovative platforms, and coefficient on innovation variable was found to be statistically insignificant. Explaining this anomaly include unfavorable terms of loans; high lending rates, inadequate knowledge; small-size loans; and short repayment period. Meanwhile, loan process time, loan size, loan access (distance) have a higher probability of increasing loan access by MSMEs.Therefore, there is a need to intensify measures towards enhancing MSMEs access to credit, taking advantage of available innovative platform channels. Increasing efforts towards reducing credit risk will help to lower the lending rates, while moral suasion measures by financial regulators together with borrowers’ traceable business-record can as well entice loan providers to offer loans of larger size and longer maturity. Meanwhile, capacity building is imperative in enabling MSMEs to acquire requisite business management skills and inculcate record-keeping culture. Equally crucial is enhancing measures towards maintaining the country’s macro-economic stability with a view to boosting demand for credit and improving MSMEs’ loan repayment capabilities.

scholarly journals The importance of record keeping to the growth of small and medium scale enterprises (SMEs) in Zimbabwe

2015 ◽  
Vol 12 (4) ◽  
pp. 744-754 ◽  
Author(s):  
Ongayi Vongai Wadesango
Keyword(s):  
Financial Reporting ◽  
Financial Management ◽  
Survey Design ◽  
Small And Medium Enterprises ◽  
Management Skills ◽  
Social Scientists ◽  
Accounting Systems ◽  
Record Keeping ◽  
Medium Enterprises ◽  
Descriptive Survey

This study sought to investigate the influence quality financial reporting systems have on the performance of small and medium enterprises. Descriptive survey design was employed. The sample size was 100 SMEs, selected using stratified random sampling. Data were collected using a questionnaire and an observation list. Data collected using questionnaire were analyzed using Statistical Package for the Social Scientists (SPSS). The study found an absence of formal accounting systems in many firms due to lack of financial and accounting knowledge among the owner‐managers. It is recommended that financial institutions and policy makers need to focus on educating such owner‐managers with necessary accounting and financial management skills.

scholarly journals Women Entrepreneurs in Bangladesh- Challenges and Determining Factors

2015 ◽  
Vol 9 (2) ◽  
pp. 27-41 ◽  
Author(s):  
Tania Afroze ◽  
Md Kashrul Alam ◽  
Eliza Akther ◽  
Nahid Sultana Jui
Keyword(s):  
Gender Discrimination ◽  
Women Entrepreneurs ◽  
Small And Medium Enterprises ◽  
Secondary Data ◽  
Business Environment ◽  
Sales Promotion ◽  
Social Constraints ◽  
Management Skills ◽  
Economic Activities ◽  
Medium Enterprises

The aim of this study is to find out the major challenges that hinder smooth operation of women entrepreneurs of Bangladesh. It also finds the reasons behind the success of the women entrepreneurship. Both primary and secondary data have been used to conduct the study. The questionnaire included questions about economic problems, family related issues, social constraints and other limitations faced by women entrepreneurs and the reasons behind their success. Women involved in various small and medium enterprises take on the challenge to work in a male-dominated society, competitive and complex economic and business environment. However, the identified challenges are inadequate capital, sales promotion, getting permission to start-up a business, gender discrimination, illiteracy and lack of knowledge among women, non-availability of training program and technical support, lack of managerial experience, in some cases young people make ill talk about the enterprise and so on. Personal qualities such as hard work and perseverance, management skills and marketing skills, support provided by their spouses or family are the main reasons behind the success of the women entrepreneurs. The level of participation of women in mainstream economic activities remains insufficient and the percentage of women in business is still much below than that of their male counterparts.Journal of Business and Technology (Dhaka) Vol.9(2) 2014; 27-41

scholarly journals Contributions of Micro, Small and Medium Enterprises (MSMEs) to Income Generation, Employment and GDP: Case Study Ethiopia

2019 ◽  
Vol 12 (3) ◽  
pp. 46 ◽  
Author(s):  
Hailai Abera Weldeslassie ◽  
Claire Vermaack ◽  
Kibrom Kristos ◽  
Luback Minwuyelet ◽  
Mahlet Tsegay ◽  
...  
Keyword(s):  
Small And Medium Enterprises ◽  
Secondary Data ◽  
Weak Links ◽  
Income Generation ◽  
Access To Credit ◽  
Challenges And Opportunities ◽  
Entrepreneurial Climate ◽  
Market Linkage ◽  
Medium Enterprises ◽  
Log Linear

The pillar goals of this research are to review the conditions of MSMEs, their contribution to employment creation, income generation, poverty alleviation, contributions to the local, regional and national GDP, stimulating entrepreneurial climate and the challenges and opportunities in the design, implementations, marketing opportunities, linkages, financial sources, dynamics, survival and policy landscape. To achieve the presented purposes, we collected primary and secondary data through a survey, focus group discussions and documents reviews. We used qualitative and quantitative approaches to analyse the collected data using various statistical programs. We used descriptive and econometric statistical analysis to process the data, obtain the relevant estimation results and fully discuss the purposes under the study. We firmly maintain that the systems we presented, and the methods applied enabled us to tackle the aims of the study. MSMEs in Ethiopian are the chief sources of job, income, significantly contribute to the local, regional and national GDP and key policies to eliminate poverty. In the log-linear regression, we found that MSMEs initial capital, BDS, access to credit facility are the key determinants of MSMEs performance. Majority of the MSMEs produce for local and regional markets; few for national markets and none for international markets. Besides, we found that sex of MSMEs owner/manager, BDS, access to credit and capital size strongly determine the survival of MSMEs. Based on this study, the major obstacles of MSMEs in Ethiopia are the question of sustainability, lack of credit, weak market linkage, insufficient training, weak human resources development schemes, dependency on government and spoon-feeding mentality, oscillations in government policies, price variations, weak links and poor market and product development strategies.

scholarly journals COMMERCIAL BANKS AND THEIR EFFECT ON SMALL AND MEDIUM ENTERPRISES FINANCING IN RWANDA: A CASE STUDY OF KIGALI CITY AND SOUTHERN PROVINCE

AGROFOR ◽  
2021 ◽  
Vol 6 (1) ◽  
Author(s):  
Mutamuliza EULARIE ◽  
Giramata AURORE
Keyword(s):  
Financial Services ◽  
Commercial Banks ◽  
Small And Medium Enterprises ◽  
Financial Industry ◽  
Chi Square ◽  
Southern Province ◽  
Start Up ◽  
Chi Square Test ◽  
The Government ◽  
Medium Enterprises

Commercial Banks worldwide are identified to be one of the key players in the financial industry that have positively affected individuals involved in business, and the economy at large, through the functions they perform in the economy. However, inadequate financing in the activities of Small and Medium Enterprises (SMEs) is still the major constraint faced by people involved in business activities. Even though the Government of Rwanda has made effort to improve the accessibility to credit, entrepreneurs still have some challenges to access financial services in order to improve their businesses. The purpose of this research was to assess the contribution of commercial banks in financing SMEs in Rwanda. A sample of 60 SMEs was selected in Kigali and Southern Province of Rwanda. Data was collected from the respondents through a structured questionnaire. The collected data were analyzed using descriptive statistics such as frequencies and percentage distributions. A Pearson Chi-Square Test was used to analyze the relationship between commercial banks and SMEs in Rwanda. The results indicated that the main purposes of loan application were start-up capital, working capital and expansion of businesses. The results also revealed that there was positive relationship between commercial banks and SMEs in Rwanda. The results revealed as well, that commercial banks in Rwanda played a crucial role in contribution to SME’s economic development and small and medium entrepreneurs who got credit from commercial banks expanded their businesses and increased their income.

scholarly journals The Development of Digital Economy in Indonesia

2020 ◽  
Author(s):  
Regina Joanita
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Digital Economy ◽  
Banking Services ◽  
Start Up ◽  
Rapid Changes ◽  
Strategic Role ◽  
Medium Enterprises ◽  
Selection Of ◽  
Financial Technology

Industrial Era 4.0 changed the entire chain and management of all branches of industry with various technologies. All financial-based services are developing rapidly in Indonesia marked by the emergence of many start-up companies. Rapid changes to digital banking and financial technology show that technology can play a strategic role in providing financial services that can be accessed quickly. The availability of digital banking services and products is highly valued by customers, both individuals and business people, especially in Micro, Small and Medium Enterprises (MSME). The large selection of digital banking products is certainly intended to motivate customers to love and be loyal customers and become part of the modern lifestyle. The presence of the digital economy is a new opportunity as well as a serious threat to the banking industry that is churning into digital banking in order to retain customers and attract new customers from millennials.

scholarly journals EFFECT OF DIGITAL FINANCIAL SERVICES ON THE GROWTH OF SMES IN KENYA

2021 ◽  
Vol 2 (1) ◽  
pp. 79-94
Author(s):  
Nandwa Nelly Awinja ◽  
Olanrewaju Isola Fatoki
Keyword(s):  
Financial Services ◽  
Social Networking Sites ◽  
Small And Medium Enterprises ◽  
Online Advertising ◽  
Descriptive Analysis ◽  
Business Environment ◽  
Digital Platforms ◽  
New Business ◽  
The Government ◽  
Medium Enterprises

The digital economy is a new business environment that enables enterprises to operate and provide services via the Internet and digital platforms. The study was on the effect of economic digitisation on growth of SMEs in Nairobi CBD. The specific objectives were to determine the effect of digital financial services, digital content, digital values and skills and the effect of online advertising on the growth of small and medium enterprises. The sample size in this study was 1000 SMEs formally registered in the study area from where a sample of 300 was randomly selected. The questionnaire was employed for the purpose of data collection from which out of the 300 questionnaires distributed, 180 were returned representing a 60% response rate. Guided by the research objectives, the data collected through the questionnaire were sorted, coded and presented in graphical and tabular forms for the purpose of descriptive analysis. To determine the significance of the relationship between the dependent and independent variables, a regression analysis was carried out using the Statistical Package of Social Sciences (SPSS) version 24. The study established that digital financial services were significant factors in ensuring growth of SMEs in Kenya. The study concluded that Mobile payments have become a favorite means of making financial transactions.  The study also established that Applications available for mobile digital devices is expected to increase enormously.  Digital payment technology has increased over the last decade. From the findings, it was concluded that Consumers grow more familiar with the different payment systems available and encourage more transactions. The SMEs should explore the possibility of forming a management committee to streamline economic digitisation issues. It is recommended that the organization clearly spell out economic digitisation procedures and criteria. This can stir positive growth  among SMEs establishments and can result in effective management. The Government and the various agencies should also make provisions for training programs for SMEs  to empower them in terms of economic digitisation. The SMEs should not rely on external professionals to assist in digitisation as this may be expensive. It is also recommended that the SMEs should adopt digital financial services. E-commerce will ensure increased profitability for small and medium enterprises. They should also have Social networking sites, which have proved to be popular online activities in relation to time, spent. They should also adopt Innovation driven entrepreneurship as it contributes to increase in sales revenue, market share, efficiency, customers’ loyalty and firm profitability.

Adopting Islamic microfinance as a mechanism of financing small and medium enterprises in Uganda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ssemambo Hussein Kakembo ◽  
Muhamad Abduh ◽  
Pg Md Hasnol Alwee Pg Hj Md Salleh
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Skills Training ◽  
Microfinance Institutions ◽  
Alternative Scheme ◽  
Content Type ◽  
The Poor ◽  
Islamic Microfinance ◽  
Financial Challenges ◽  
Medium Enterprises

PurposeDespite the fact that small and medium enterprises (SMEs) play a crucial role in strengthening the financial sector within developing and emerging economies through providing employment opportunities to the rural and urban population, capacity building in the form of skills training and economic empowerment, they still face a plethora of challenges that continue to threaten their existence, performance and growth. Access to operational and administrative funds needed to execute their activities effectively is a significant challenge and detrimental to the growth of SMEs in Uganda. Conversely, Islamic microfinance has been noted as a panacea to the challenges of financial inaccessibility among SMEs, especially in developing countries. The purpose of this paper is therefore to investigate how the adoption of Islamic microfinance can play a fundamental role in enhancing the sustainability of microfinance institutions (MFIs) while meeting the financing challenges of SMEs in Uganda.Design/methodology/approachIn this study, a review of existing literature was carried out to critically examine relevant information (literature sources) and empirical studies on SMEs, their performance and challenges. The study being conceptual tries to understand how Islamic microfinance could be adopted as an alternative scheme of financing to bridge the gap and mitigate the financial challenges facing SMEs.FindingsThe study finds that the existing MFIs have failed to achieve their objectives of providing financial services to the poor and SMEs while remaining sustainable. This has left the majority of SMEs within Uganda's informal sector financially handicapped, thus leading to their failure in meeting their expectations and eventually collapsing even before celebrating their third or fourth birthdays. However, the enactment into law of the Financial Institutions Amendment Act 2016 that paved the way for the introduction of Islamic finance in Uganda, and the Tier 4 Microfinance Institutions and Money Lenders' Act, 2016 that incorporated the aspects of Islamic microfinance within the existing microfinance framework as seen and is perceived as a key factor in addressing the financial challenges faced by MFIs and the SMEs if fully adopted.Research limitations/implicationsThis study is conceptual with no empirical investigation and discussion of key theories. On the contrary, it will be imperative and useful when carrying out more extensive hypothetical studies by future researchers, specifically in the area of Islamic microfinance that is relatively new in Uganda.Practical implicationsPractically, this paper will serve as a guide to policymakers and practitioners in the field of microfinance by adding a flair that could enable in bridging the challenges associated with inadequate financing of SMEs in Uganda.Social implicationsSocially, the social aspects of charity (Zakah and Sadaqah) will help to improve the livelihood of the poorest of the poor who cannot engage in active business through meeting their basic needs of life without begging thereby preventing them from being social outcasts.Originality/valueThe study establishes Islamic microfinance (IMF) as a promising and unexplored viable option potentially needed in intensifying the financing needs of SMEs in Uganda. The paper provides an entirely new dimension in nature and way microfinance products should be structured with a view of ensuring that there is sustainable provision of financial services to SMEs. The paper adds real value to the existing conventional microfinance products and services in Uganda, given the ethical and moral attributes of Islamic microfinancing practices that are assumed to efficiently and effectively motivate SME owners and other small entrepreneurs to thrive.

Islamic Financing Effects on Small Medium Enterprises Competitiveness

2021 ◽  
Vol 1 (1) ◽  
pp. 100-113
Author(s):  
Adedeji Saidi Adelekan
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Practical Implication ◽  
Least Square ◽  
Islamic Finance ◽  
Business Practices ◽  
Sustainable Business ◽  
Product Price ◽  
Medium Enterprises ◽  
The Impact

Islamic financing has been identified as an alternative to conventional financial services. However, the extent to which the Islamic financing model could drive small and medium enterprises' (SMEs) competitiveness has been a significant concern in the existing literature. Hence, this study investigates the impact of Islamic financing on SMEs' competitiveness.Adopting the survey research design, the study investigated 400 SME owners/managers in the Southern part of Nigeria. The study employed the ordinary least square regression in the analysis of data. The result establishes that Islamic finance is a significant driver of SMEs' competitiveness. The results specifically reveal that Islamic finance is critical in driving product price, customer experience, and quality of products. The practical implication of Islamic finance may reduce its operational cost since it comes at a no-interest rate while giving room for more innovative prices and customer-centric products at competitive prices. SMEs are to leverage on the opportunities provided by Islamic finance for them to adopt sustainable business practices 

The Potential of Sharia Fintech in Increasing Micro Small and Medium Enterprises (MSMEs) in The Digital Era in Indonesia

2021 ◽  
Vol 4 (1) ◽  
pp. 23
Author(s):  
Syarifuddin Syarifuddin ◽  
Rahmawati Muin ◽  
Akramunnas Akramunnas
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Technology Development ◽  
Small And Medium Enterprises ◽  
Easy Access ◽  
Muslim Country ◽  
Digital Era ◽  
Savings And Loan ◽  
Islamic Financial Institutions ◽  
Medium Enterprises

The potential for financial technology development or fintech with sharia basis in Indonesia is still quite large. Indonesia as the largest Muslim country in the world, becomes an undeniable potential. The purpose of this research is to know the potential of Fintech in increasing MSMEs in the digital era in Indonesia. This study uses document studies with a literature review approach. The results of this research show that. First, The patterns applied by sharia fintech in dealing with the problems faced by MSMEs in Indonesia include the ability to manage and analyze data in the era of big data, improve technology infrastructure, create transaction systems easily, content-based marketing in terms of digital marketing, establish cooperation, collaboration, and investment with relevant stakeholders, and innovation of fintech products. Second, The potential of Sharia Fintech in increasing MSMEs in the digital era in Indonesia, MSMEs have been using many applications and cooperating with banks and sharia Savings and Loan Cooperatives, so as to provide easy access to various types of bank financial services and savings and loan cooperatives, now financial institutions are able to reach all MSMEs to remote areas, Sharia Fintech has opened access to business financing more easily and quickly from banking institutions and other Islamic financial institutions.

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