Financing Problems Faced By The Lebanese SMEs: An Empirical Study

Abstract

During the last two decades, there was unanimity around the importance of the role of Small and Medium Enterprises (SMEs) in the development of economies, of job creation and social stability. This issue concerns industrialized countries as well as developed countries. The purpose of this paper is to study the methods and the financing problems faced by Lebanese SMEs, as well as the behavior of banks in terms of credit allocation. An illustration is presented through a survey covering 56 SMEs: 16 SMEs belonging to the area of Kartaba and 40 SMEs belonging to Beirut suburbs. Moreover, and based on data collected from 30 credit files and on interviews held with important bankers, this paper try to identify the components of the credit assessment process, the risk acceptance criteria, and the categories of loans available for SMEs.