SYED NAZMUL HUDA1* and MD. RUHUL AMIN2
1=Lecturer, School of Business, Asian University of Bangladesh, Dhaka and 2=Assistant Professor, Department of Finance & Banking, Islamic University, Kustia, Bangladesh. Email: ruhul1112003@yahoo.com . *Corresponding author’s Email: nazmulaub@hotmail.com
ABSTRACT
Many SMEs in emerging markets often rely on informal sources of capital, such as borrowing from relatives, to meet finance needs. When a small or medium enterprise gets access to formal channels, it typically looks to a bank as its primary source of financial services. Banks have begun to focus their attention toward this untapped market and their service of SMEs is a major factor in increasing SME access to finance. In this paper the authors have tried to overview the role of banks regarding SMEs financing in terms of working capital, mid-term loan, long term loan, industrial loan, commercial loan and services which have been found significantly below the international standards during 5 years observations. The authors have tried to identify the problems and SWOT mix of SMEs financing regarding banks and to overcome the problems to provide some recommendation for the improvement of financing SMEs including certain financing mechanisms and supports can promote greater access to banking services and efficient use of funds are given during this study period. The study was done in 2011.
Keywords: SME, Financing and GDP.