Small and Medium Enterprises (SMEs) Financing Through One Semi-Formal Sector Bank and Five Formal Sector Banks to Create Entrepreneurs: An Empirical Study

Author:Nawazeesh Muhammad Ali a*, Wanakiti Wanasilpb

Abstract:
Small and medium enterprises are a pivotal key to the socio-political-economic development of developing countries like Bangladesh. Today SMEs contribute to lump sum of Bangladeshi exports contributing to higher national income. SMEs have also reduced poverties through creating job opportunities in the country. Thus, it is crucial to study the financing and investment on the SMEs through both the semi-informal sector such as Grameen Bank a non-scheduled bank and formal sector which includes a number of scheduled commercial banks offering SME banking facilities. Research question of the study is whether Grameen Bank and commercial banks through financing SME sector can help to attain financial deepening to create entrepreneurs which in turn reduce poverty in Bangladesh? The study has chosen Grameen Bank and five commercial banks and used quantitative analysis to see their impacts on the socio-political-economic development in Bangladesh by creating entrepreneurs through SME financing. As such empirical analyses through econometric methods are being used. Results were found mostly to be significant, thus both the formal and semi-formal sectors are successful in developing the nation through entrepreneurship creation by SME financing. There are wider scopes to develop SME sector in Bangladesh through appropriate financing to create entrepreneurs thus reducing poverty as suggested by the authors.

Keywords:Key Words: SME Financing, Poverty Reduction, Financial Sector, Development Economics, Political Economics, Entrepreneurship, Grameen Bank, Commercial Bank, Women Empowerment, Econometric Methods, Economic Growth.

DOI:10.46333/ijtc/11/2/3

International Journal of Trade & Commerce (Vol: 11 Issue:2)