Importance
The economic and social importance of the small and medium enterprise (SME) sector is well recognized in academic and policy literature. It is also acknowledged that these actors in the economy may be under-served, especially in terms of finance. This has led to significant debate on the best methods to serve this sector.
Although there have been numerous schemes and programmes in different economic environments, there are a number of distinctive recurring approaches to SME finance.
- Collateral based lending offered by traditional banks and finance companies is usually made up of a combination of asset-based finance, contribution based finance, and factoring based finance, using reliable debtors or contracts.
- Information based lending usually incorporates financial statement lending, credit scoring, and relationship lending.
- Viability based financing is especially associated with venture capital.
- Reliable for all the small ticket loan.
Read more about this topic: SME Finance
Famous quotes containing the word importance:
“What is done for science must also be done for art: accepting undesirable side effects for the sake of the main goal, and moreover diminishing their importance by making this main goal more magnificent. For one should reform forward, not backward: social illnesses, revolutions, are evolutions inhibited by a conserving stupidity.”
—Robert Musil (1880–1942)
“An interesting play cannot in the nature of things mean anything but a play in which problems of conduct and character of personal importance to the audience are raised and suggestively discussed.”
—George Bernard Shaw (1856–1950)
“When will the world learn that a million men are of no importance compared with one man?”
—Henry David Thoreau (1817–1862)