A Concept Paper on Factors Affecting Access to Trade Finance by Export Oriented Small and Medium Enterprises in Malaysia and Sri Lanka
DOI:
https://doi.org/10.31674/ijmhs.2024.v08i02.001Abstract
The inability to obtain adequate access to finance from the formal banking sector has become a key global constraint for the expansion and development of Small and Medium Enterprises, known popularly as SMEs, engaged in international trade exports. The effect of specific underlying factors on accessing adequate trade finance by these niche SMEs are largely unknown, creating a considerable gap in the existing knowledge. The objective of this concept paper, therefore, was the development of suitable hypotheses and a conceptual framework to explore the relationship between access to trade finance by export-oriented SMEs and their export performance and to thereby unearth the contributory factors to the problems faced by the export-oriented SMEs using secondary data from two countries in the Asian region: Malaysia and Sri Lanka. The research method employed was a comprehensive, systematic review of the literature. The PRISMA guidelines were employed to identify suitable research studies to be used. Thematic and descriptive analysis of the data gathered revealed several contributory factors that could be broadly categorised into three themes: weaknesses among the SMEs themselves, weaknesses in the formal banking sector, and the lack of governmental and non-governmental support towards exporting SMEs. Thus, a well-fitted conceptual framework could be developed. This paper contributes significantly to the literature providing an insight into the contributory factors affecting access to trade finance for export-oriented SMEs in Malaysia and Sri Lanka in turn, enabling them to contribute more towards the economic growth of the two countries.
Keywords:
Access to Trade Finance, Export Orientation, International Trade, Small and Medium EnterprisesDownloads
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