The Qualitative Relationship Between Banks and SMEs in Wales

A long-term or close and intense relationship with banks could help overcome the main problems like asymmetric information. Using collateral is another way to overcome the effects of asymmetric information. The findings show that having collateral does not reduce loan costs, and on the other hand it will increase the availability of finance for small businesses. In general, small businesses use pecking order theory in choosing their formal sources of finance. Because of their lack of knowledge, they are not completely aware of available sources of finance. Banks are the first and most important external finance provider for small businesses, so having a good long-term relationship with banks can help them to overcome problems like asymmetric information, which would influence their access to more finance. Collateral is the other way to access more finance and it can help small businesses in their relationship with banks, especially in a period of unsustainability to reduce the risks for banks.

Emerging Economies and Financing of SMEs

Existing evidence has shown that SMEs make great contributions to innovation, job creation and economic growth. This chapter reviews recent literature on (1) the important roles played by SMEs in emerging markets and (2) the impacts of financial development on SME finance in such markets. It also uses a unique database form World Bank Enterprise Survey (WBES) to document the financing patterns, constraints and other financial issues of SMEs in emerging markets. The descriptive statistics derived from WBES show clear variations of SME financing patterns between emerging and developed markets and shed light on the important role played by financial development in financing SMEs.

Financial Entrepreneurship in Three Emerging Economies

This chapter compiles an up-to-date and academically grounded study on enterprise financing in the emerging economies of Ghana, Pakistan and Yemen in terms of global dynamics. The research question addressed ‘what is the nature of financial entrepreneurship in the three countries of Ghana, Pakistan and Yemen as emerging economies'. The methodology used is a comparative study of the three countries involving an investigation of the economic background, financial bodies, enterprises, and funding SMEs to determine the nature of financial entrepreneurship in the three countries as emerging economies. In response to the research question it was found that financial bodies have an important influence on enterprises especially in terms of the way SMEs are funded. From the findings of the comparative study a fundamental model was developed as the main contribution to knowledge concerning the financing of SMEs in emerging economies taking into account important financial aspects, the process of entrepreneurship and the significant outputs of SME activities and growth.

Small and Medium Enterprises' Challenges of Accessing Microfinance in Nigeria

Despite the fact that small and medium enterprises have been viewed as a major promoter of technological development and employment generation in Nigeria, the sector has been neglected by successive governments (Gideon, 2015). This has resulted in unpalatable consequences on the economy (Gideon, 2015). The major challenge of the sector is poor funding (Afolabi & Ehinomen, 2015). Consequently, policies and efforts should be geared towards accelerating the growth and development of the sector (Afolabi & Ehinomen, 2015). According to Onwumere, (2000) a lack of funding has been a specific obstacle to investment and growth in the sector. The need to contribute to the current debate, update knowledge on the subject matter and make informed recommendations when implemented will lead to a change in fortune for the small and medium enterprise sector in the Nigerian economy which has informed this study. The chapter sets out to explore the qualitative relationship between small and medium enterprises and banks. Despite the fact that small and medium enterprises have been viewed as a major promoter of technological development and employment generation in Nigeria, the sector has been neglected by successive governments. This has resulted in unpalatable consequences on the economy. The major challenge of the sector is poor funding. Consequently, policies and efforts should be geared towards accelerating the growth and development of the sector. A lack of funding has been a specific obstacle to investment and growth in the sector. The need to contribute to the current debate, update knowledge on the subject matter and make informed recommendations when implemented will lead to a change in fortune for the small and medium enterprise sector in the Nigerian economy which has informed this study. The chapter sets out to explore the qualitative relationship between small and medium enterprises and banks.

Micro-Finance and Poverty in India

During the last decade, microfinance has been recognised as one of the most important and innovative ways to address the financial needs of the poor. Despite being an issue with considerable policy implications, there are very few studies which empirically examine the impact of microfinance on poverty in the case of India. Analysing the formal and informal segments of financial system of India, the present paper provides an impact evaluation study of microfinance in India. The study is done on three dimensions of microfinance: 1) client outreach, 2) financial health, and 3) poverty reduction. The impact evaluation study is done following a unique methodology different from the widely used microfinance poverty penetration index. The paper incorporates impact of other relevant economic variables like infrastructure and banking sector development on poverty in the analysis, hitherto overlooked in literature. The result presented in the paper shows that the impact of microfinance on poverty alleviation in Indian states, when controlled for other variables, is not significant.

The Effectiveness of Financing the Marketing of Small and Medium-Sized Enterprises in Qatar and the Gulf Co-Operation Council (GCC) Countries

This chapter considers whether financing the marketing of small and medium-sized enterprises (SMEs) in Qatar and the Gulf Co-operation Council (GCC) countries has an effect on the advertising of these businesses. The authors investigate the various marketing finance problems facing SMEs and the effect on advertising. The chapter employs quantitative methods to gather and analyze data and the research strategy adopted involved a sequential procedure. In order to answer the research question how effective the financing of marketing of SMEs in the GCC countries is in terms of advertising the general profiles of respondents and businesses, the importance of the marketing department to the business and the marketing capabilities of SMEs were investigated taking into account the financing of the marketing budget.

Problems Financing Small Business Enterprises in the Current Economic, Business, and Organizational Environment in Nigeria

A number of significant problems face small business enterprises (SBEs) in terms of their ability to source financing in the current economic, business and organizational environment in Nigeria. This chapter investigates various financing difficulties facing SBEs, and from the findings makes recommendations for future support initiatives which will be of considerable interest to academics, policy makers and practitioners. The chapter explores problems involved in the financing of SBEs in terms of global dynamics investigating financial bodies, enterprises and the funding of SBEs. Secondary data sources are used to assess the existing financial environment which exists in Nigeria and from this identify the main financial drawbacks facing SBEs.

A Comparative Study of Financing Innovation Capacity for Romanian SMEs in a Global Economy

The increasing economic importance of technology, information, business processes and human capital has been notified and considered. Small businesses are more affected than the large and very large ones in terms of innovation. The object of our analysis will focus on local analytical developments of the performance indicators resulting from the development of innovative capacity so as to achieve an economic and financial profile of several representative regions. The results of this study show that innovative Romanian SMEs will determine the achievement of competitive performance in domestic and international markets, as their fundamentals concerning the nature of products, knowledge, information and communication means used are experiencing a rapid development. Coherent and effective settlement of the innovation problems the SME sector is facing, starting with the causes that generate them, is conditioned by the operation in key areas which determine their functionality and performance.

The Influence of Specific Criteria of Emerging Markets on SME Financing in MENA Markets

In this chapter we are interested in the impact of specific microstructure criteria of emerging markets in the financing of SMEs especially in risk measures. The main risk measurement tool is the Value-at-Risk (VaR) which is recommanded by the Basel II Committee on Banking Supervision (BCBS). The recommendations of the Basel II committee give financial institutions the freedom to develop their own Value-at-Risk model of risk measurement in order to calculate their capital requirements for financial risk. The Basel II committee recommends the use of back testing in order to validate the choice of the best method. In order to finance SMEs enterprises in emerging market we must consider the specific microstructure criteria of these emerging markets such as low liquidity, very pronounced asymmetric information, over predictability and high volatility how affects the risk estimation.

Access to Finance

Microinsurance provides indemnity for those with low income and with limited access to insurance options. Aimed at supporting sustainable means of living for individuals, microinsurance is a market-based practice. Many microinsurance products focus on the famine and drought in Latin America, Africa and Asia and most commonly provided by European insurance companies. However, demand for microinsurance is also the case in developed countries. Microinsurance was introduced in Turkey in 2011 when 55,000 low-income women were insured as part of a microinsurance package created with the collaboration of Turkish Foundation for Waste Reduction (TISVA) and Günes Insurance. This section provides information on the aim, importance, and scope of microinsurance which plays a significant role in action against poverty while explaining practices available in Turkey and the world.