Funding Challenges Facing SMEs’ Growth in Lebanon
International Journal of Business and Economics Research
Volume 9, Issue 1, February 2020, Pages: 50-59
Received: Jan. 28, 2020; Accepted: Feb. 11, 2020; Published: Feb. 14, 2020
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Authors
Riad Makdissi, Finance Department, Faculty of Economics and Business Administration, Lebanese University, Tripoli, Lebanon
Jimmy Tannous, Finance Department, Faculty of Economics and Business Administration, Lebanese University, Tripoli, Lebanon
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Abstract
Building the capacity of small and medium-sized enterprises is at the heart of the concerns of modern economies. These types of enterprises are the engine of growth through the creation rate, explained by the low level of investment they require, the level of job creation and the low level of technology that gives them adaptability to Changes. In most developing countries, the problem of funding is common for SMEs. The funding challenge is the main barrier to the growth of SMEs, either due to lack of internal or external funds or due to the difficulty of the processes to be followed for loans’ approval. What is most worrying in Lebanon is that SMEs are fundamentally opportunities to get out of underdevelopment. Today, banks are finding it extremely difficult to finance SMEs in terms of the problems of informalities, weak guarantees and low capitalization. SMEs represent a significant share of banks' customers; that is why banks need to give more attention to the SME sector, seeking to meet at its best their needs and expectations. A survey was carried out on a sample of 110 Lebanese SMEs working in different regions in Lebanon and in various sectors. In addition to the questionnaire, we met qualified bankers from the five top leading banks in Lebanon to highlight lending requirements and procedures, risk assessment and management, approval and rejection decisions related to loans. As a result, limitation of access to funds were mentioned with different ways of solutions, requesting a real support and cooperation between actors: public authorities, central bank, financial institutions and SMEs.
Keywords
SME, Financing, Funding, Challenges, Banks, Lebanon
To cite this article
Riad Makdissi, Jimmy Tannous, Funding Challenges Facing SMEs’ Growth in Lebanon, International Journal of Business and Economics Research. Vol. 9, No. 1, 2020, pp. 50-59. doi: 10.11648/j.ijber.20200901.16
Copyright
Copyright © 2020 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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