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Access to finance for small and medium-sized enterprises: the case of Sri Lanka

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posted on 2023-01-18, 17:36 authored by Pandula Gamage
Submission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the School of Economics, Faculty of Business, Economics and Law, La Trobe University, Bundoora.

Although, the financing gap for SMEs is more pervasive in developing economies, there is a vacuity of research that examines the situation in these countries. Hence, the purpose of this study is to investigate the access to bank finance and related issues in the SME sector of Sri Lanka. The empirical evidence for this study is drawn from the Sri Lanka enterprise survey data set obtained from the World Bank. The logistic regression model was used to empirically test the literature-driven hypotheses. However, before proceeding to the logistic regression results, preliminary chi-square results are presented in order to obtain a better understanding of univariate differences and associations in the data. This study finds that access to bank finance is largely determined by ownership type of the firm, industry sector, location of the firm, availability of audited financial statements and the perception of the owner-manager on access to finance. This study also reviews several capital structure theories and human capital theories and finds that these theories provide little support in understanding the financial behaviour of SMEs in Sri Lanka. This dissertation contributes to the understanding of the access to finance in the SME sector in three aspects. First, to the knowledge of the researcher, this study is the first examination of the access to finance by SMEs in Sri Lanka. Second, this study brings together research from several disciplines to develop a conceptual framework for understanding the SME financing situation. Third, the study increases knowledge of the perceptions of SME owner-managers regarding their access to finance. In terms of policy, the findings of this dissertation provide policy makers with new insights on how to tailor macroeconomic policy and regulations to help overcome the finance gap in this important sector of the economy. In particular, policy makers can make informed decisions that are based on this research to articulate policies, to develop training programmes, and to design support systems that can positively address the factors affecting access to credit to SMEs in Sri Lanka. The findings of this study can be replicated in other developing countries as well.

History

Center or Department

Faculty of Business, Economics and Law. School of Economics.

Thesis type

  • Ph. D.

Awarding institution

La Trobe University

Year Awarded

2013

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This thesis contains third party copyright material which has been reproduced here with permission. Any further use requires permission of the copyright owner. The thesis author retains all proprietary rights (such as copyright and patent rights) over all other content of this thesis, and has granted La Trobe University permission to reproduce and communicate this version of the thesis. The author has declared that any third party copyright material contained within the thesis made available here is reproduced and communicated with permission. If you believe that any material has been made available without permission of the copyright owner please contact us with the details.

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