The Impact of Demographic Factors on Accessing to Finance in Libya’s SMEs

Abstract

The aim of this study is to investigate the impact of the demographic factors on accessing finance of Libya's SMEs. The results reported here are based on 557 survey questionnaires about the SMEs in different sectors in Libya. Our results confirm that demographic factors consisted of age, size, and sector have positive and significant impact on the accessing finance of Libya's SMEs. Small and medium enterprises (SMEs) are considered the actual growth engine in the economy of many countries. SMEs play a significant role in driving up the key macroeconomic indicators. The definition of SMEs varies in different countries, and even in various institutions within the same state. They can be categorized according to a number of different criteria: for instance, number of employees, the invested capital, and volume of sales. In the Libyan context, the SMEs are about 46% of the overall number in the North Western of Libya, and about 36% in the North Eastern of the country. The private sector owns approximately 80% of SMEs, while a small corporate owns only 16% and 3% of SMEs are owned by families (Schiffer et al. 2001). A retail restaurant that comprises of Food and Beverages sector is ranked the first in the number of employees and firms, while metals and heavy metals segment is the second. Others include textiles and clothing, wood and paper, furniture, and ceramics and bricks. It is also evident that some industries have higher expansion opportunities than others. This is because of their link with bigger industries. Libya's SMEs in general suffer from some problems which hinder this sector to flourish. Among these problems, easy access to finance is the main one. There are many factors such as social, economic, demographic and political-for the low access to finance .This study will examine the effect of demographic factors on accessing to finance in Libya's SMEs.