Access to Finance

Journal of Banking & finance 30 (2006) 29312943 www.elsevier.com/locate/jbf Small and medium-size enterprises: access to ?nance as a growth constraint Thorsten Beck *, Asli Demirguc-Kunt The World Bank, 1818 H Street N.W., Mail Stop MC 3-300, Washington, DC 20433, coupled States Available online 30 June 2006 Abstract This paper presents recent interrogation on access to ?nance by smallish and medium-size enterprises (SMEs). SMEs convention a large part of private sector in many developed and developing countries. While cross-country inquiry sheds doubt on a causal link amongst SMEs and economic development, in that location is substantial evidence that small ?rms baptismal font larger growth constraints and have less access to nut sources of orthogonal ?nance, potentially explaining the lack of SMEs contribution to growth. Financial and institutional development helps alleviate SMEs growth constraints and increase their access to external ?nance and thus levels the playing ?eld between ?rms of di?erent sizes. Speci?c ?nancing tools such as leasing and factoring can be serviceable in facilitating greater access to ?nance even in the absence of well-developed institutions, as can systems of credit information sharing and a more competitive banking structure. Ã" 2006 Elsevier B.V. All rights reserved.

JEL classi?cation: L11; O1; O4 Keywords: Small and medium-size enterprises; rail line environment; Economic development 1. Introduction Numerous studies have discussed that small and medium enterprises (SMEs) atomic number 18 ?nancially more constrained than large ?rms and are less likely to have access to formal ?nance. Until recently, however, there was little cross-country evidence on the extent to which size * like author. Tel.: +1 202 473 3215; fax: +1 202 522 1155. E-mail address: tbeck@worldbank.org (T. Beck). 0378-4266/$ - fulfil front matter Ã" 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.jbank?n.2006.05.009 2932 T. Beck, A. Demirguc-Kunt / Journal of Banking & Finance 30... If you want to get a full essay, order it on our website: Orderessay

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