SME ACCESS TO FINANCE IN EMERGING ECONOMIES: A COMPARATIVE STUDY OF PAKISTAN AND MALAYSIA
DOI:
https://doi.org/10.24193/subbnegotia.2017.4.01Keywords:
SME, Pakistan, Malaysia, access to finance, emerging economies.Abstract
It has been widely accepted that SMEs make a significant contribution to the socio-economic and political infrastructure in both developed and developing countries. SMEs make up more than 96% of all businesses in emerging economies that provide two out of three private sector jobs. Yet, the importance of SMEs notwithstanding as confronted with several hindrances which impede their development. In emerging economies access to finance has been found as one of the major constraints to SMEs growth. In Malaysia and Pakistan SMEs contributing towards economic growth, however huge finance gap for SME sector exist in both countries. By summarizing current data this paper highlights the share of SME sector towards economic growth, financing gap and supply/demand side challenges towards access to finance in Malaysia and Pakistan. The comparison of both countries revealed that challenges are more severe in lower-middle income country (Pakistan) because of inappropriate policies and their implementation. However, the upper-middle income country (Malaysia) consistent growth can minimize the finance gap for SME sector quickly.
JEL Code: M1
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