Abstract
Micro, small and medium enterprises are the building blocks of any economy
across the globe. By and large, 40% share to GDP is contributed by the MSMEs
across the world and in Pakistan as well. But unfortunately, banks just offer 7-
8% of the total loans/funds to MSMEs which is pretty nominal amount. The
main purpose of conducting this research study was to examine the hurdles that
refrain MSMEs access to finance of banks especially in Khyber Pakhtunkhwa.
For that purpose, 410 MSMEs from retailing, wholesaling, manufacturing and
services sectors in Peshawar and Bannu were randomly surveyed through
personally-administered questionnaires. Items of Questionnaire was partially
adopted, adapted and developed so as to fulfil the needs of research study.
Questionnaire of the study contained 39 items in total. Correlations, multiple
regression analysis along-with normality test (Shapiro-wilk test) were conducted
for analysis purpose. After analysis, researcher came to the conclusions that, low
financial literacy and training of MSMEs entrepreneurs, cumbersome
requirements of banks and non-credible recordkeeping by MSMEs were the
main hurdles that impeded the MSMEs access to finance of banks in Khyber
Pakhtunkhwa. On the basis of research findings, researchers recommended that,
policymakers should take a closer look over those prescriber problems and
eradicate by creating such environments of skill developments and training
whereby the entrepreneurs and related workforce of MSMEs can enhance their
financial know-how and skills. Furthermore, banks should restructure their loan
granting requirements in such a way that MSMEs can meet those requirements
easily. Lastly, MSMEs are supposed to adopt sophisticated accounting
techniques and get rid of daybook approaches (i.e. Roznaamcha) so as to their
business transaction records credible and ultimately get full financial access to
banks.
Manzoor Ahmad Khan, Sher Kamal, Naveed Saif. (2018) Analyzing The Factors That Impede MSMES Access to Finance In Khyber Pakhtunkhwa: Case Of Peshawar And Bannu, Abasyn Journal of Social Sciences, Volume-11, Issue-2.
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