Financial Innovations for SMEs in Sri Lanka

In Sri Lanka, SMEs play a significant role and are more constrained by different obstacles, and limited access to finance is a significant problem. The purpose of this paper was to investigate financial innovations to develop SMEs in Sri Lanka. The study was based on primary and secondary sources. Primary data were from SMEs' owners or managers gathered by using survey methods. The sample comprised 63 SMEs in Sri Lanka operating different kind of industries. The finding reveals that commercial banks' loans are the most critical source of SME financing, even though the SME has many difficulties in dealing with banks. Leasing financing and loans from other financial institutions are less important than other financial sources. Equity financing, venture capital, and factoring are uncommon among SMEs in Sri Lanka. Indeed, there was evidence that SMEs in Sri Lanka still preferred to use traditional financing sources instead of innovative financial sources. Furthermore, SMEs do not have sufficient knowledge about innovative financial authorities, and financial institutions fail to provide adequate support for SMEs. Promoting programs to develop managerial and IT skills for SMEs, establishing particular banks for SMEs related to the small community, and other financial such as factoring and venture capital can be developed to reduce SMEs' financing problem in Sri Lanka. Keywords: Access to Finance, Financial Innovations, SMEs DOI: 10.7176/JESD/11-20-08 Publication date:October 31st 2020

The Generic Private Sector in an Economy of Transition: Developments and Impacts on the Czech Economy

The long-lasting problems of the Czech economy, which have become apparent since 1996, have their roots in the behavior of a significant part of the domestic enterprise sector. These problems were called into being by a very intensive, nevertheless deeply non-standard mass privatization. The authentic (generic) private sector cannot be based on a command coming from the upper hierarchies of the social organization. It can arise only from gradual acts at the level of economic agents making their decisions autonomously at the grass roots of the economy. Soft market environment set by the Czech mass privatization policies was counter-productive for the development of entrepreneurial activities as defined by Schumpeter. The lobbies of pressure groups, defending the privileges of former socialist corporations, became dominant in shaping Czech politics, fiscal and banking economic policies and the build-up of economic institutions. The authentic private sector that evolved mainly from small and medium-sized enterprises was driven from its start to a position of an outsider. Notwithstanding the lack of government support, market imperfections, bureaucracy and failing judiciary, the sector of newly established businesses has shown a high degree of viability and at the end of the 1990s it became a dominant player on the market side of the Czech economy. The future of the Czech economic development cannot be separated from the situation in both the enterprises under foreign ownership and the small and medium-sized firms under indigenous owners. The economic policy-making should be based on these facts and provide for the requirements of these two progressive segments of the Czech authentic private sector. This also implies that merits of mass privatization should be subject to a fundamental overhauling on both the academic and the economic policy sides

Three Essays on the Risk Management of Logistics Finance

중국은 이미 세계에서 주요 생산국과 소비국 중의 하나가 되었다. 2016년 등록한 기업이 하루 평균 15,000개 정도로서 중국 경제의 빠른 발전에 기여했다. 또 한편으로는 중소기업의 금융문제는 갈수록 어려워지고 있다. 이와 같은 문제는 중소기업에 도덕적 리스크, 정보비대칭, 영업익스포져 등 의 요소가 존재하기 때문에 은행의 중소기업에 대한 신용평가가 높지 않기 때문이다. 게다가 대출 절차가 갈수록 복잡해지고 은행이 수익을 얻기가 어려워져 중소기업도 대출을 받기가 힘들고 투자 환경이 어려워지고 있다. 이런 상황에서 물류금융이 새로운 금융방식으로서 나타났다. 물류금융은 물류산업의 세 당사자 - 중소기업, 은행 및 물류기업 - 에게 효과적인 금융플랫폼을 제공할 수 있다. 물류금융은 중소기업의 금융문제를 해결할 뿐만 아니라 은행과 물류기업에게 새로운 이윤창출 방식을 제공할 수 있을 것이다. 이에 따라 세 당사자에게 모두 이익을 가져다 줄 가능성을 가져왔다. 그러나 한편으로는 새로운 리스크도 함께 왔다. 물류금융에서 발생하는 리스크문제를 해결하기 위한 방안을 찾기 위해 이 논문은 세가지 관점에서 연구를 진행해 세 개의 에세이로 분석했다. 첫 번째, 게임이론을 바탕으로 물류금융의 신용리스크 관리를 연구한다. (EssayⅠ) 첫 번째 에세이에서는 먼저 은행 및 물류기업이 직면한 신용리스크를 분석한다. 다음으로 게임이론을 이용하여 은행과 중소기업 간의 관계를 분석하고, 물류기업을 도입해서 세 당사자 간의 게임적인 방식을 분석한다. 이를 통해 은행이 감독하는 확률, 중소기업의 신뢰도의 확률 및 물류기업이 계약을 이행하는 확률을 찾아 신용리스크의 이론적인 근거를 제시한다. 중소기업과 물류기업의 신용불안요소 및 위약요소를 찾는 과정에서 아래와 같은 정책을 제언했다. 1. 은행과 물류기업이 중소기업 신용관리 플랫폼을 설리하고 모든 정보를 공유한다. 2. 은행과 물류기업의 협력관계를 강화해야 한다. 3. 은행이 고객의 재무자료 데이터뱅크 시스템을 완성시키고 감독비용을 최소화 시킨다. 4. 물류기업과 중소기업의 감독관리를 강화하고 중소기업 신용불량 상황의 발생을 최소화시킨다. 두 번째, 통합신용보장방식에 있어 은행의 물류기업 리스크 평가 모델을 설정한다. (Essay II) 두 번째 에세이에서는 먼저 통합신용보장방식에서 은행이 직면하는 리스크를 변별하고 다음으로 기업의 재무지표를 활용하여 요인분석모델을 설정한다. 물류기업 금융리스크의 주요 지표를 분석하고 물류기업의 금융리스크를 계량화 분석한다. 통합신용보장방식에서 은행의 기업 선택표준을 제공한다. 물류기업의 금융리스크는 주로 경영현황, 부채상환 능력, 수익성, 성장성 등에서 비롯된다. 이 논문은 통합신용보장방식에서 은행에게 기업의 선택표준을 제공하며 이를 통해 은행의 물류기업에 대한 심사효율성과 신뢰성을 향상시킬 수 있다. 이 논문은 은행이 물류기업의 담보계좌(担保账户)를 설립하고 물류기업의 재무 분석 플랫폼을 구축해야 한다고 제안한다. 그리고 상장한 물류기업의 연도 보고서를 충실히 작성하고, 은행의 기업관리기관, 세무기관 간의 소통체계를 강화해야 하고 물류기업의 재무리스크 관리를 강화해야 한다. 그리고 물류기업의 거래대금에 대한 관리를 강화해야 한다. 세 번째, 통합신용보장방식에서 물류기업의 중소기업 선택방법을 연구한다. (Essay III) 세 번째 에세이에서는 먼저 물류기업이 직면한 리스크를 변별하고, AHP과 LP기법을 활용하여, 창고의 한정량과 대출한도를 제약조건으로 하는 물류기업의 중소기업에 대한 적정 대출 규모 모델을 설정한다. 그 결과 물류기업의 이윤 극대화를 보장하기 위하여 아래와 같이 몇 가지 제안을 한다. 1. 물류기업 창고의 한정량에 대한 경보시스템을 구축하고 담보물의 저장 공간을 확보해야 한다. 2. 담보물에 대한 평가체계를 완성하고 물류기업 담보물가치의 적절성을 확보해야 한다. 3. 중소기업에 대한 신용평가 플랫폼을 구축하고 물류기업 대출의 안전성을 확보해야 한다. 위 내용을 전체적으로 보면 이 논문은 물류금융의 리스크 관리상에 세 가지 문제를 연구했다. 그리고 물류금융리스크의 관리에 대해 전략적인 제안을 제시했다. 이와 같이 보완된 물류금융은 중국경제를 지속적으로 발전시킬 수 있다고 예측한다.Korean Abstract viii INTRODUCTION: General Remarks & Literature Review 1 1.1 Background and Objective 1 1.2 Scope and Methodology of the Study 5 1.3 Structure and Contents 6 1.4 Literature Review 8 1.4.1 The Theoretical Study of Logistics Finance 8 1.4.2 Study of Logistics Finance Risk Management 13 ESSAY I: The Credit Risk Management of Three Parties in Logistics Finance-Using Game Theory 17 1. Introduction 17 1.1 Background and Objective 17 1.2 Scope and Methodology of the Study 18 1.2.1 Scope of the Study 18 1.2.2 Methodology of the Study 18 1.3 Structure and Contents 21 1.4 Literature Review 22 2. Identification of Logistics Financial Credit Risk 25 2.1 Relationship among the Three Principal Delegates 25 2.2 Identification of Credit Risk 26 2.2.1 The Credit Risk of Bank 26 2.2.2 The Credit Risk of Logistics Company 27 2.2.3 The Cause of the Credit Risk 27 3. Game Analysis 30 3.1 Game Analysis between Banks and SMEs 30 3.1.1 Hypothesis 31 3.1.2 Model Building 32 3.1.3 Model Solving 33 3.2 Tripartite Game Model 35 3.2.1 Model Hypothesis 35 3.2.2 Model Building 38 3.2.3 Model Solving 39 4. Policy Implication 45 5. Summary of Essay I 45 ESSAY II: The Risk Management of Bank Selecting Logistics Company Under Unified Credit Guarantee Mode 47 1. Introduction 47 1.1 Background and Objective 47 1.2 Scope and Methodology of the Study 48 1.2.1 Scope of the Study 48 1.2.2 Methodology of the Study 49 1.3 Structure and Contents 51 1.4 Literature Review 52 2. The Risk of Banks under Unified Guarantee Credit Mode 55 2.1. Operational Process of Unified Guarantee Credit Mode 55 2.2. The Risk of Bank under Unified Guarantee Credit Mode 56 3. Index Establishment 57 3.1 Bank Assessment Contents 57 3.2 Establishment of Financial Index System 59 3.3 Explanation of Data Indicators 61 4. Factor Analysis 70 4.1 Data Collect 70 4.2 Model Building 70 4.3 Model Solving 72 4.4 Model Comprehensive Evaluation 75 5. Policy Implication 76 6. Summary of Essay II 77 ESSAY III: The Risk Management of Logistics Company Selecting SME Under Unified Credit Guarantee Mode 79 1. Introduction 79 1.1 Background and Objective 79 1.2 Scope and Methodology of the Study 79 1.2.1 Scope of the Study 79 1.2.2 Methodology of the Study 80 1.3 Structure and Contents 84 1.4 Literature Review 85 2. Risk Identification of Logistics Company 88 2.1 Credit Risk from SME 89 2.2 Risks from Mortgage 89 2.3 Risks of Internal 90 2.4 Risks from External 90 3. Model Building and Solving 90 3.1 AHP Analysis 90 3.1.1 Analytic Hierarchy Chart of SME's Risk Assessment 90 3.1.2 Hypothesis 92 3.2 LP Analysis 96 3.2.1 The Establishment of Objective Function 96 3.2.2 Restrictions 97 3.2.3 Model Calculating 98 4. Policy Implication 99 5. Summary of Essay III 100 Summary and Conclusion 102 1.1 Summary of Research 102 1.2 Conclusion of Research 105 1.3 Research Prospects in the Future 108 Reference 110 Acknowledgment 118Docto

Strategies for sustainable socio-economic development and mechanisms their implementation in the global dimension

The authors of the book have come to the conclusion that it is necessary to effectively use modern approaches to developing and implementation strategies of sustainable socio-economic development in order to increase efficiency and competitiveness of economic entities. Basic research focuses on economic diagnostics of socio-economic potential and financial results of economic entities, transition period in the economy of individual countries and ensuring their competitiveness, assessment of educational processes and knowledge management. The research results have been implemented in the different models and strategies of supply and logistics management, development of non-profit organizations, competitiveness of tourism and transport, financing strategies for small and medium-sized enterprises, cross-border cooperation. The results of the study can be used in decision-making at the level the economic entities in different areas of activity and organizational-legal forms of ownership, ministries and departments that promote of development the economic entities on the basis of models and strategies for sustainable socio-economic development. The results can also be used by students and young scientists in modern concepts and mechanisms for management of sustainable socio-economic development of economic entities in the condition of global economic transformations and challenges

How Do Formal and Informal Financial Arrangements Influence the Growth and Routines of Small and Medium Scale Enterprises? A Qualitative Investigation of The Manufacturing Sector in Southwest Nigeria

There is a substantial body of empirical research on institutional arrangements through which financial relationships are structured in Africa. Although current literature on formal and informal financial institutional arrangement has advanced our understanding of their comparative importance, there is a dearth of empirical investigations on the implications of loan preconditions on the growth of/adoption of routines in small and medium enterprises (SMEs).. Thus, this study investigates the impact of formal and informal financial arrangements on SMEs growth and routine change in the Nigerian manufacturing sector. Semi-structured interviews were conducted with representatives of eleven SMEs that are beneficiaries of loans from formal and informal financial lenders were targeted. Nine representatives of formal and informal lenders were also interviewed. The outcome sheds light on how financial arrangements may impact growth and routine change amongst SMEs in Nigeria. The growth and routine change experienced by SME are shown to vary according to the loan attributes and preconditions associated with the type of lender respectively. Also, the findings reveal the nature of the interplay between formal and informal financial lenders and its consequences; such as improved access to loans, better enforcement, savings and disbursement; while also helping the government to achieve its lending target and easing the challenges of trust and quality relationships. These results contribute to the theoretical debate regarding the origins of routines and the mechanisms of routine change. Furthermore, it emphasises that further quantitative studies would be essential in investigating its relevance for (on) policy

Small beer? Peer-to-peer lending in the craft beer sector

Peer to peer lending has advantages of ease of access to finance, timely and efficient delivery of funding, and is particularly beneficial at a specific time in the life cycle of the firm

A Quantitative Study of Multilayered Market Systems and Small and Medium-Sized Enterprises

Small and medium-sized enterprises (SMEs) account for approximately 50% of the world\u27s gross domestic product. However, these economic agents suffer from inadequate access to liquid funds to finance their operations. The liquidity gap has led to early bankruptcy and liquidation, stagnant growth and development, and fewer employment opportunities. The problem under study was the effect of funding limitations on SMEs\u27 business operations and growth. The purpose was to examine the impact of multilayered capital systems as alternative funding for SME growth. This study was informed by Gilbrat\u27s law and the theory of financial exclusion. The research questions addressed the use of a multilayered capital market as a substitute for the conventional methods of funding for SMEs. A survey instrument was used to collect data using a stratified random sample of 54 small-scale business owners and finance professionals. These participants were identified from U.S. Census Bureau data between 2009 and 2014 across the information technology, service, and manufacturing sectors. Multiple regressions and correlation analyses were used to analyze the data. The results showed that age, credit score, average turnover, and total assets have significant impacts on obtaining funding, especially total assets. Moreover, results showed that growth rates correlated with funding from multilayered capital systems. This study contributes positively to social change by highlighting alternative means of funding SMEs, leading to reduced dependency on government, less crime through gainful employment, and improved corporate social responsibility due to better interactions among community member

Assessing the Financial Mechanisms for Innovation Support in the Republic of Uzbekistan: A Comparative Analysis of Enablers and Constraints to Innovation Across Two Industries

Innovation is fundamental not only to individual firms but ultimately to a country\u27s economic growth and stability. Innovation Systems assert that innovation depends not only on how individual firms and external actors operate, but also on the dynamics of their interaction as part of the system. While funding for innovation is a central theme of Innovation Systems models, there is a gap in the literature on this topic, particularly in regard to the role played by government in transition economies (Bruton, Su, & Filatotchev, 2018). The majority of the research has focused on micro/meso-level support, but there is a significant gap at the macro level. This thesis bridges this gap by theoretically conceptualising and empirically testing the effect of macro-level financial support mechanisms on both innovation and performance constructs within a Sectoral Innovation System (SIS), spanning firms’ internal capability and their external context. Using interview and survey data from Uzbekistan’s machine building and chemical industries, this thesis contends that a firm’s internal capability consisting of absorptive capacity, international growth orientation, investment in-house R&D, and barriers in the market where a firm operates, affects this relationship. Specialists from academia, governmental organisations and managers from both industries participated in interviews. A survey of both sectors yielded 351 complete responses. This data was analysed through structural equation modelling using Mplus. The research findings validate the theoretical model put forward and indicate that the existence of macro-level financial support mechanisms impact innovation and performance constructs through mediated factors. Furthermore, control variables such as age, size, and government ownership have a significantly positive correlation with access to finance, absorptive capacity, international growth orientation, and firm performance. Although industry controls show a significantly negative link to incremental innovation and financial performance, there is a significantly positive link to radical innovation performance. This justifies the existence of a differentiated SIS approach for innovation support in Uzbekistan. Interestingly this research found that international growth orientation is a more significant factor than absorptive capacity and in-house R&D respectively, in the relationship between access to finance and innovation performance. A key contribution of this research is that it advances the understanding of factors that contribute to firm level innovation success. It also exposes best practice for firms and government policymakers in order to maximise performance outcomes. The core argument of this thesis is that access to finance and the individual components of firms’ internal capabilities need to be synchronized to maximize value creation and innovative performance. In this process, the role of government is crucial in designing effective financial and legal infrastructures. Absorptive capacity, international growth orientation, and investment in-house R&D are key micro-level components. This multipronged approach, although challenging to implement, would help to drive more favourable outcomes. Managers are offered a framework to analyse the market and internal capabilities which may moderate the supply of finance and work towards aligning them to achieve superior performance outcomes