Funding Challenges Facing SMEs’ Growth in Lebanon

Riad Makdissi; Jimmy Tannous

doi:doi:10.11648/j.ijber.20200901.16

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Funding Challenges Facing SMEs’ Growth in Lebanon

Riad Makdissi, Jimmy Tannous

Published in International Journal of Business and Economics Research (Volume 9, Issue 1)

Received: 28 January 2020 Accepted: 11 February 2020 Published: 14 February 2020

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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.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 1)
DOI	10.11648/j.ijber.20200901.16
Page(s)	50-59
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

SME, Financing, Funding, Challenges, Banks, Lebanon

References

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Riad Makdissi, Jimmy Tannous. (2020). Funding Challenges Facing SMEs’ Growth in Lebanon. International Journal of Business and Economics Research, 9(1), 50-59. https://doi.org/10.11648/j.ijber.20200901.16

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Riad Makdissi; Jimmy Tannous. Funding Challenges Facing SMEs’ Growth in Lebanon. Int. J. Bus. Econ. Res. 2020, 9(1), 50-59. doi: 10.11648/j.ijber.20200901.16

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AMA Style

Riad Makdissi, Jimmy Tannous. Funding Challenges Facing SMEs’ Growth in Lebanon. Int J Bus Econ Res. 2020;9(1):50-59. doi: 10.11648/j.ijber.20200901.16

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@article{10.11648/j.ijber.20200901.16,
  author = {Riad Makdissi and Jimmy Tannous},
  title = {Funding Challenges Facing SMEs’ Growth in Lebanon},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {1},
  pages = {50-59},
  doi = {10.11648/j.ijber.20200901.16},
  url = {https://doi.org/10.11648/j.ijber.20200901.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200901.16},
  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.},
 year = {2020}
}

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TY  - JOUR
T1  - Funding Challenges Facing SMEs’ Growth in Lebanon
AU  - Riad Makdissi
AU  - Jimmy Tannous
Y1  - 2020/02/14
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200901.16
DO  - 10.11648/j.ijber.20200901.16
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 50
EP  - 59
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200901.16
AB  - 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.
VL  - 9
IS  - 1
ER  -

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Author Information

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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APA Style

Riad Makdissi, Jimmy Tannous. (2020). Funding Challenges Facing SMEs’ Growth in Lebanon. International Journal of Business and Economics Research, 9(1), 50-59. https://doi.org/10.11648/j.ijber.20200901.16

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ACS Style

Riad Makdissi; Jimmy Tannous. Funding Challenges Facing SMEs’ Growth in Lebanon. Int. J. Bus. Econ. Res. 2020, 9(1), 50-59. doi: 10.11648/j.ijber.20200901.16

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AMA Style

Riad Makdissi, Jimmy Tannous. Funding Challenges Facing SMEs’ Growth in Lebanon. Int J Bus Econ Res. 2020;9(1):50-59. doi: 10.11648/j.ijber.20200901.16

Copy | Download

@article{10.11648/j.ijber.20200901.16,
  author = {Riad Makdissi and Jimmy Tannous},
  title = {Funding Challenges Facing SMEs’ Growth in Lebanon},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {1},
  pages = {50-59},
  doi = {10.11648/j.ijber.20200901.16},
  url = {https://doi.org/10.11648/j.ijber.20200901.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200901.16},
  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.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Funding Challenges Facing SMEs’ Growth in Lebanon
AU  - Riad Makdissi
AU  - Jimmy Tannous
Y1  - 2020/02/14
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200901.16
DO  - 10.11648/j.ijber.20200901.16
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 50
EP  - 59
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200901.16
AB  - 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.
VL  - 9
IS  - 1
ER  -

Copy | Download