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- Title
Does SME financing perform well from both demand and supply sides? The case of a developing country.
- Authors
Ali, Md. Rostam; Ahmed, Rustom Ali; Tisha, Rushafa Tasnim; Islam, Md. Ashikul
- Abstract
This study provides a way of understanding to analyze the performance of SME credit both from the demand and supply sides. Both primary and secondary data are used which are collected from entrepreneurs of SMEs and the head office of Rajshahi Krishi Unnayan Bank, a leading SME loan providing government-owned agricultural development bank in the Rajshahi district of Bangladesh. Some descriptive statistics, accounting and financial techniques, and a regression model are used to analyze the data. The study finds that the average ROA of SMEs is 35.87% and the ROE of SMEs is 62.81%. It indicates that the SMEs are earning more than the cost of the fund collected from the institutional sources. It is also observed that there is a significant effect of institutional credit on ROE of SMEs but not on ROA. On the other hand, the growth rate of SME NPL is higher than the total NPL during the study years that is of course alarming regarding SME loan recovery. The institutional SME credit should be increased by applying proper strategies for increasing loan recovery performance.
- Subjects
SMALL business; SUPPLY &; demand; BUSINESSPEOPLE; DESCRIPTIVE statistics; RATE of return
- Publication
International Journal of Financial Engineering, 2021, Vol 8, Issue 4, p1
- ISSN
2424-7863
- Publication type
Article
- DOI
10.1142/S2424786321420020