Abstract
Keeping in view the importance of small and medium enterprises (SMEs) for the growth of a nation, we must also keep an eye on the challenges faced by those SMEs. There are various kinds of financing and supply chain options available for SMEs but they still face lot of hindrances. This paper would help us to understand why SMEs are important for the development of any country and how could we help the SMEs from facing challenges related to financing and supply chain. This study further highlights the key financing issues faced by SMEs and also focuses on major supply chain challenges confronted by the SMEs. This study put emphasis on the concept of supply chain finance (SCF) and that how SCF could help SMEs to overcome those challenges. In addition, this paper also points out the benefits and prospects of SMEs. Even though the concept of SCF is still in developing phase but it has shown significant assistance to SMEs in order to grow further.
Highlights
The importance of small businesses in the global economy can be compared with the value of the circulatory system in the organism
It is obvious and demonstrated by various studies that obtaining financing from banks or any other financial institution is a more prominent obstruction for Small and medium enterprises (SMEs) than it is for large organizations, in the developing countries, and that obstruction in receiving the funds unfavorably influence the development of SME area than that of substantial organizations (Schiffer and Weder, 2001; Beck et al, 2005; Beck et al, 2006)
The research in area of supply chain finance is in development phase and most of the literature on SCF relates to functional level
Summary
The importance of small businesses in the global economy can be compared with the value of the circulatory system in the organism. The entrepreneurs who are considered as a bigger part in the economic development are usually in an inferior position because of lack of accessible financing from the banks and financial institutions. The major reason behind this is deficiency in inadequate availability of management & financial advisory services that could facilitate people to run their businesses as per the best international practices. This results in ineffective utilization of deployed resources which affect the business and eventually deteriorate the overall economy. This paper highlights supply chain challenges faced by SMEs and issues faced by SMEs while obtaining the financing.
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