Proceedings of the 9th International Conference on Research in Management and Economics
Year: 2024
DOI:
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SME Finance
Nasir Iqbal Mughal, Waseem Ud Din Sheikh
ABSTRACT:
Access to Finance is the backbone of the SME supporting in development of business plans taking into consideration identified needs for quality certification, climate smart agriculture, etc. The local market economies lack financial infrastructure, unavailability of adequate financing solutions such as emergency loans, short term/ payday loans, bridge financing, unavailability of adequate collaterals, lack of comfort to accessing formal financial services including delays in processing financing applications. This is the reason why in most of the rural economies, the growers and small-scale processors rely on informal financing options including artis. Thus, on the supply side, output 3.5 aims to address three factors to spur provision of growth capitals for MSMEs in the priority districts and products. These three factors are
- lack of appropriate and targeted financing instruments, products and services
- low presence of financial services providers in project districts/ product segments
- low risk appetite of financial institutions.
By linking SMEs with financial institutions the potential SMEs, the FIs will design financial products meeting the needs of the SMEs which can clarify the potential market better and ease access to finance for MSMEs. The A2F grants would be used as catalyst to reduce the gap in demand and supply in terms of access to finance to all actors of value chain and at the same time provide the opportunity to FIs for launching of new product lines in value chain financing.
keywords: Small and medium enterprise access to financial service and access to bank account, Efficiency of credit allocation, Collateral for bank loan access to finance, Capacity building program helps supply of credit & credit guarantee scheme provides the chance of survival to SME, higher interest rate