Abstract:
Based on existing literature this paper provides a clearly conceptual
framework for Small and Medium Enterprises (SMEs) financing in the global
context. The conceptual framework has been organized in terms of some selected
crucial aspects, such as: the financial institution structures; the lending
infrastructures, and finally the lending strategies in using SME financing. The
financial institution structures deals with the comparative advantages of different
types of financial institutions. Here we focus mainly on the comparative advantages
of large vs. small financial institutions; foreign-owned vs. domestically-owned
institutions, and state-owned vs. privately-owned institutions in lending to SMEs.
The lending infrastructure includes: the information environment; the legal, judicial
and bankruptcy environment, and finally the tax and regulatory environments, all of
which may directly or indirectly affect SME credit availability. Regarding lending
strategies, we focus mainly on the core technologies such as: financial statement
lending; small business credit scoring; asset-based lending; factoring; trade credit,
and finally the relationship lending technology. We focus on the parts of the
financial system that are most relevant to SME finance. We concentrate on the
private debt markets that provide external finance to SMEs, and exclude discussions
of the public equity and debt markets, which are generally beyond the reach of
SMEsSmall and Medium Enterprises (SMEs) Financing Revisited: Lessons for
Bangladesh
