Additionality of government guaranteed loans for SMEs in Israel (original) (raw)
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SMES Financing: A cross country overview of Government Support Programs for SMES
International Academic Journal of Entrepreneurship and Business Sciences, 2023
SMEs play an active role in economic growth. Financing is regarded as one of the biggest hurdles facing SMEs growth and sustainability. Puzzled by how seriously this factor affects the firms leading to high closure rate, governments across the world have continued to pursue programs in support of SMEs financing. These include but not limited to establishment of Affirmative Action Funds. The presentation makes an appraisal of Government Support provided to SMEs.
Do experience, Education and Business plan influence SMEs start-up Bank loan? The Case of Libya
2012
The financing of small and medium enterprises (SMEs) has been a topic of great interest among both policy-makers and researchers because of the growing importance of SMEs in the economic development around the world. There is also sizeable evidence that SMEs face large growth constraints and have less access to formal sources of external finance such as bank loans, which potentially explains the lack of SMEs' contribution to economic growth. Thus, to understand SMEs' startup financing, we rely on the human capital of owner-manager and SMEs' business strategy to investigate how human capital and business strategy influence SME startup with bank loans. Using survey data based on 76 SMEs in Tripoli and Sabha, the logit model is employed to examine the hypothesized factors. The results show that business plan and owner-manager experiences do influence SMEs' startup bank loan in Libya.
Financing Problems Faced By The Lebanese SMEs: An Empirical Study
International Business & Economics Research Journal (IBER), 2011
During the last two decades, there was unanimity around the importance of the role of Small and Medium Enterprises (SMEs) in the development of economies, of job creation and social stability. This issue concerns industrialized countries as well as developed countries. The purpose of this paper is to study the methods and the financing problems faced by Lebanese SMEs, as well as the behavior of banks in terms of credit allocation. An illustration is presented through a survey covering 56 SMEs: 16 SMEs belonging to the area of Kartaba and 40 SMEs belonging to Beirut suburbs. Moreover, and based on data collected from 30 credit files and on interviews held with important bankers, this paper try to identify the components of the credit assessment process, the risk acceptance criteria, and the categories of loans available for SMEs.
Small Business Economics, 1992
This paper presents an empirical assessment of the employment effects of two assistance schemes aimed at improving the accessibility of small businesses to capital. The first scheme is a revolving loan fund operating in two small towns. The second is a capital grant scheme aimed at promoting industrial activity in rural areas. Empirical data relating to the period 1986-89 is analysed for both schemes. The employment effectiveness of the loan fund is analysed via the estimation of cost-per-job indices and the estimation of the 'deadweight' effect, i.e., employment that would have been created even in the absence of the financing scheme. For the grant scheme, the methodology implemented involves the use of regression techniques in order to isolate the effect of the financial assistance on employment generation. The results point to the cost-effectiveness of this form of assistance. From a public policy point of view, the need for targeting these type of schemes (both spatially and sectorally), is stressed.
Financing of small and medium enterprises (SMEs): Determinants of bank loan application
African Journal of Business Management, 2014
The main focus of this paper is to answer the question, 'what are the factors that determine a SME to apply for a bank loan?' Four elements namely human capital, firm, business strategy and information asymmetry underlie this study's theoretical framework. The main objective of the paper is to develop a bank loan model based on applicability. The model was developed using quantitative method coupled with a hypothetical-deductive testing approach, applied on primary data on loan applications gathered from the questionnaires. The logistic regression tests indicate that the business experience of a firm's owner does not have a significant relation with the firm's tendency to apply for a bank loan. The educational background of the firm's owner, the firm's size, collaterals and loans with interest were found to be negatively related to its tendency to apply for bank loans. However, the firm's business plans and start-up relationship with bankers were found to be positively related to the firm's applying bank loans.
FINANCIAL INSTRUMENTS FOR THE SUPPORT OF SMES: THE CASE OF THE ENTREPRENEURSHIP FUND
THE IMPACT OF EU STRUCTURAL AND INVESTMENT FUNDS ON GREECE (1981-2019): SUCCESSES, FAILURES, LESSONS LEARNED AND COMPARISONS WITH OTHER EU MEMBERS (co-authors: Argyriou Thanasis, Labrinidis George) - Published by Jean Monnet Centre of Excellence and University of Peloponnese (2020), 2020
In a capitalist economy uneven development leads to a split between largescale and small scale capital; the latter comprises the bulk of small and medium-sized enterprises (SMEs). Small scale capital faces worse conditions in both short term and long term financing, namely in accessing both working and investment capital. Therefore, a structural financing gap appears that pertains to SMEs. To introduce the main actor of this drama, it is a common secret that bank lending is tighter, lower, at a higher price to SMEs, compared to large enterprises. Public policy steps in, in the form of financial instruments. Although these are general features of capitalism, crisis exacerbates financial difficulties, banks’ channels shut down to unprecedented levels and the urgency for state intervention is acute. SMEs financing is a matter of particular concern for governments at a global level. At the EU level and in the context of an integrated policy design for the support of SMEs, as illustrated by the Small Business Act (SBA) (COM (2008), 394 final), there has been a clear trend in recent years advancing the use of financial instruments beyond traditional subsidies. In Greece in particular, SMEs are more numerous, smaller and weaker, compared to other advanced countries while the last capitalist crisis was particularly severe. According to the results of the European Central Bank Survey on Access to Finance of Enterprises (SAFE), access to finance is the number one problem Greek companies have been facing during the deep prolonged crisis. Hence, the necessity for state intervention for the benefit of SMEs is well documented. Indeed, such an intervention was orchestrated. Although money was so dear at the heart of the crisis, wages and pensions were dramatically cut and the state was at the verge of official bankruptcy, a Fund was formed to address banks’ withdrawal from SMEs financing. Banks were indispensable part of this project, both in designing and implementing it. Although banks which for various reasons did not provide finance to SMEs during the economic crisis, were called in to cover the gap that they themselves have created. This paper formulates and builds on this theoretical contradiction in order to evaluate the results of the Entrepreneurship Fund in supporting the development of SMEs. This paper is included in the book "THE IMPACT OF EU STRUCTURAL AND INVESTMENT FUNDS ON GREECE (1981-2019): SUCCESSES, FAILURES, LESSONS LEARNED AND COMPARISONS WITH OTHER EU MEMBERS", published by Jean Monnet Centre of Excellence Governance and the University of the Peloponnese (2020), ISBN: 978-960-02-3694-1.
Contribution of Commercial Banks in Financing Small and Medium Enterprises
2019
Small and medium enterprises (SMEs) play an important role in any economy, especially in increasing Gross Domestic Product (GDP) and in addressing the problems of poverty and unemployment. In Jordan, these projects comprise about 90% of the total projects and occupy about 60% of the workforce and contribute about 50% of the GDP. However, they suffer greatly from the problem of providing the necessary funding to enable them to develop and continue. One of the most important sources of funding for these projects is the commercial banks. The study examined the real role played by these commercial banks in financing these projects in Jordan and found that commercial banks contribute only 10% of their total financing, this ratio is small and does not meet the purpose, The study found that commercial banks are reluctant to lend to small and medium enterprises for fear of failure of such projects and thus affect the volume of liquidity in banks. For these reasons, commercial banks do not offer any advantages to these projects either in terms of the interest rate or in terms of loan duration, grace periods, and guarantees. The results found that the state should intervene through the Central Bank and through the issuance of legislation through which commercial banks are guided to support such projects and increase the proportion of funding at the same time to protect the rights of depositors, and thus, achieve the goals of all parties.
SMEs Financing: the Extent of Need and the Responses of Different Credit Structures
Theoretical and Applied Economics, 2010
Small and medium enterprises (SMEs) have a key role in developing national economies, but are often limited by lack of development support in financing business for reasons of information asymmetry, high risks, lack of collateral, unfavorable regulatory environment. The statistics show managers given constant importance of SMEs financing opportunities, bank credit pre-eminence over other forms of financing, the lack of viable alternatives for start-up and innovative companies, etc. Market concentration, alternative between transactional or relational lending, various types of banks; state owned, private owned, foreign, large or small, are analyzed to identify the availability for SME financing. Finally, it is recognized the importance of a diversified banking markets both in terms of supply, lending technologies, but also as bank institutions itself.
Impacts of SMEs Character in The Loan Approval Stage
We attempt to integrate the prior literature on SME financing, and propose that these issues should be researched in a structured and holistic manner. To that end, we suggest that SME financing can be studied from the supply side (banks') perspective, but not be restricted to a discussion on the quantum of loan, or other quantitative measures alone. We put forward 5 categories of items that we believe should be discussed in any work concerning SME financing, being (a) the SME's personality, (b) the viability of the SME's business and/or its industry, (c) the SME's knowledge and competency, (d) the financial position of the SME, and (e) the level of detail and preparation of the loan application. We further attempt to provide examples of items to be discussed in each category based on works from the literature Keywords-character of SME, loan application, success, bank I.