Analyzing the determinants of credit accessibility of smes: evidence from western province of Sri Lanka
Katagoda Hettiarachchige, Ann Samadhi Kawmini (2025)
2025
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2025060420047
https://urn.fi/URN:NBN:fi:amk-2025060420047
Tiivistelmä
This study aimed to investigate the reasons for the limited credit accessibility of Small and Medium Enterprises (SMEs) in the Western Province of Sri Lanka, which is a significant constraint for their growth as it restrains their employment opportunities, production volumes, exports, and innovation. SMEs are crucial for the Sri Lankan economy, but their performance is hindered by various constraints, particularly in developing economies.
The study identified four main factors influencing credit accessibility: owners' characteristics, firm characteristics, loan conditions and requirements, and lenders' characteristics. A conceptual framework and multiple regression model were developed, with credit accessibility as the dependent variable and the other factors as the independent variables. Data was collected through a five-point Likert scale questionnaire and analyzed using SPSS. A sample of 170 SMEs was considered using convenience sampling procedures.
The study found that lenders’ characteristics, firms' characteristics and loan conditions and requirement significantly influence credit accessibility for SMEs in the Western Province of Sri Lanka, while owners' characteristics did not. The most influential variable is loan conditions and requirements. As recommendations, SMEs can enhance access to financial services by improving financial literacy, maintaining records, auditing, and implementing loan evaluation processes.
The study identified four main factors influencing credit accessibility: owners' characteristics, firm characteristics, loan conditions and requirements, and lenders' characteristics. A conceptual framework and multiple regression model were developed, with credit accessibility as the dependent variable and the other factors as the independent variables. Data was collected through a five-point Likert scale questionnaire and analyzed using SPSS. A sample of 170 SMEs was considered using convenience sampling procedures.
The study found that lenders’ characteristics, firms' characteristics and loan conditions and requirement significantly influence credit accessibility for SMEs in the Western Province of Sri Lanka, while owners' characteristics did not. The most influential variable is loan conditions and requirements. As recommendations, SMEs can enhance access to financial services by improving financial literacy, maintaining records, auditing, and implementing loan evaluation processes.