What determines the access to finance of smes? : evidence from the Egyptian case

Abstract EN

Financial services seem to be underutilized by small and medium enterprises (SMEs); only 50 percent deal with banks and benefit from an improved access to finance.

In addition, these firms still face several constraints in terms of access to finance.

Using an extensive census that has been recently conducted by the Egyptian Banking Institute, we try to examine the determinants of access to finance for SMEs in Egypt as well as the determinants of having banking problems.

The main findings of this paper show that legal form, economic activity, labor, capital, and sales turnover have a significant effect on having banking facilities.

In addition, we find that the smaller the firm, the higher the probability of having banking problems.

We also run a battery of sensitivity analysis tests and still find that the results remain robust.