Pssst… we can write an original essay just for you.
Any subject. Any type of essay.
We’ll even meet a 3-hour deadline.
121 writers online
Latest MSMEs that do not possess any financial history pathway documentations and those which are working from more recurring industries often have limited options of getting inexpensive financing from the formal sector or proper financial institutions with themselves. Particularly, this is factual/accurate for micro enterprises working in up-and-coming markets and during unstable economic times when credit is not readily available hand in hand. In such a case, alternatives sources of financing such as crowdfunding could be a probable helping hand.
Three – quarters of respondents had at least one existing loan in Financial Year 2017, mainly to raise working capital or cash flow to support growth. Not surprisingly, MSMEs from the capital-intensive areas like mining (89%), agricultural (78%) and utilities (77%) sectors have a stronger necessity for credits. One with those already existing loans, more than half had applied for fresh funds to refinance at better terms (interest rate and tenure) and 45% had to hoist collateral for loans in response to tighter credit terms.
Given that MSMEs in ASEAN region have most of its challenging part in obtaining funds from formal financing, it is overwhelming that only 4% of the total respondents were failed to obtain loans in Financial Year 2017, although rejection rates were positively on higher side, around 92% for respondents who were in force for almost three years with consistent operations and loan history. Most of the rejected loans were functioning in segments such as transport and logistics, retail trade and food and beverage, where competitive pressures and margins losing ground have resulted in above average business shut down rates.
Amusingly, the ability to obtain a loan does not seem to be correlated to enterprise size of its area of working. While 30% of those who were denied of the loan facilities were smaller enterprises earning their annual revenues below US $3 million and approximately 46% already had earnings of more than US $10 million. The majority of those who could not meet the criteria for formal loans were incapable to because of shortage of assets for collateral, lack of guarantors, inadequacy of financial statements or business plans, or lack of sufficient credit histories.
On an average, MSMEs reports that some loan approvals take 15 days but can sometimes take more than a couple of weeks. While marking the time consuming nature of risk in taking MSMEs, this is an area for improvement.
To export a reference to this article please select a referencing style below:
Sorry, copying is not allowed on our website. If you’d like this or any other sample, we’ll happily email it to you.
Attention! this essay is not unique. You can get 100% plagiarism FREE essay in 30sec
Sorry, we cannot unicalize this essay. You can order Unique paper and our professionals Rewrite it for you
Your essay sample has been sent.
Want us to write one just for you? We can custom edit this essay into an original, 100% plagiarism free essay.Order now
Are you interested in getting a customized paper?Check it out!