BANK CREDIT ACCESSIBILITY FOR SMALL AND MEDIUM ENTERPRISES IN HO CHI MINH CITY, VIETNAM

  • Tran Huu Ai Van Hien University, Ho Chi Minh City
  • Nguyen Thi Mong Thu Van Hien University, Ho Chi Minh City

Abstract

This study examines the impact of firm characteristics on SMEs' access to bank crediting. The study used primary data taken from a survey questionnaire of 269 SMEs that collected credit-related data concerning SMEs. Regression analysis is applied to identify the factors affecting the accessibility of bank credits. SPSS 22.0 software was used for further analysis. The results show that the characteristics of business affecting the ability to access bank credit include: enterprise's location, equity, business plan, collateral, project value and firm tax number. The factors of business plan and project value are the two most influential ones.

Author Biographies

Tran Huu Ai, Van Hien University, Ho Chi Minh City

PhD, Lecturer at the Faculty of Economics, Van Hien University, Ho Chi Minh City, Vietnam.

Research interests: agricultural products markets; SMEs functioning and government support; organic food markets; environmental issues of economic development; corporate social responsibility.

Nguyen Thi Mong Thu, Van Hien University, Ho Chi Minh City

MBA, Lecturer at the Faculty of Economics, Van Hien University, Ho Chi Minh City, Vietnam.

Research interests:  SMEs functioning and government support; consumer behavior; innovative products, markets and finances.

References

1. Abor, J. (2008). Determinants of the Capital Structure of Ghanaian firms. African Economic Research Consortium, Research Department.

2. Abor, J. (2007). Industry Classification and the Capital Structure of Ghanaian SMEs. Studies in Economics and Finance, 24(3), 207-219.

3. Baculáková, K. & Grešš, M. (2015). Cluster analysis of creative industries in the EU. Economic annals-XXI, 9-10, 15-18.

4. Barbosa, E. G., & Moraes, C. C. (2004). Determinants of the firm’s capital structure: The case of the very small enterprises. Available online at: https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0302/0302001.pdf.

5. Berger, A., & Udell, G. (2006). A more conceptual framework for SME financing. Journal of Banking and Finance, 30(11), 2945-2966.

6. Coco, G. (2000). On the use of collateral. Journal of Economic Surveys, 14(2), 191-214.

7. Da Silva A. P., Hall G., & Hutchinson P. (2007). Financial and Strategic Factors Associated with the Profitability and Growth of Small and Medium-Sized Firms in Portugal. A paper presented at International Council for Small Business, 52nd World Conference, 13th – 15th June, Turku, Finland.

8. Demirguc-Kunt, A., Maksimovic, V., Beck,T., & Laeven, L. (2006). The determinant of financing obstacles. International Journal of Money and Finance, 25, 932-952.

9. Fatoki, O., & Asah, F. (2011). The Impact of Firm and Entrepreneurial Characteristics on Access to Debt Finance by SMEs in King Williams’ Town, South Africa. International Journal of Business and Management, 6(8).

10. Gilbert, B. A. (2008). New venture performance: does location matter? Available online at: http://ftp.zew.de/pub/zew-docs/entrepreneurship/Gilbert.pdf.

11. Hall, G., Hutchinson, P., & Michealas, N. (2000). Industry effect on the determinants of Unquoted SMEs Capital Structure. International Journal of the Economic of Business, 7(3), 297-312.

12. Kitindi, E. G., Magembe, B. A. S., & Sethibe, A. (2007). Lending decision making and financial information: the usefulness of corporate annual reports to lender in Botswana. International Journal of Applied Economics and Finance, 1(2), 55-60.

13. Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. The American Economic Review, 53(3), 433-443.

14. Myers, S. C. (1984). Capital structure puzzle. Journal of Finance, 39(1), 575-592.

15. Olutunla, G. T. & Obamuyi, T. M. (2008). An empirical analysis of factors associated with the profitability of Small and medium-sized enterprises in Nigeria. African Journal of Business Management, 2(x), 195-200.

16. Popkova, E.G., Zolochevskaya, E.Y., Litvinova, S.A. & Zima, Y.S. (2017). New Scenarios Of Joint Crises Fighting In Socio-Economic Sphere Of Russia And Greece. European Research Studies Journal, 20(1), 49-55.

17. Shane, S. (2008). The importance of angel investing in financing the growth of entrepreneurial ventures. Quarterly Journal of Finance, 2 (02), 1-42.

18. Sorooshian, S., Norzima, Z., Yusuf, I., & Rosnah,Y. (2010). Structural Modeling of Entrepreneurships effectiveness. World Applied Sciences Journal, 10(8), 923-929.

19. Stepanova, D. I., Garnov, A.P., Brykin, A.V. & Jančíková, E. (2019). Irrational Behaviour of Youth When Taking Financial Decisions. International Journal of Economics & Business Administration, 7(1), 378-387

20. Stiglitz, J., & Weiss, A. (1981). Credit rationing in markets with imperfect information. American Economic Review, 71, 393-410.
Published
2021-03-31
How to Cite
Ai, T. H., & Thu, N. (2021). BANK CREDIT ACCESSIBILITY FOR SMALL AND MEDIUM ENTERPRISES IN HO CHI MINH CITY, VIETNAM. The EUrASEANs: Journal on Global Socio-Economic Dynamics, (2(27), 35-46. https://doi.org/10.35678/2539-5645.2(27).2021.35-46

Most read articles by the same author(s)

1 2 > >>