| Summary: | Small and medium-sized enterprises (SMEs) are now recognised as being of major importance to the strategic agendas of many countries around the world since they can lower unemployment and increase economic growth. This is particularly significant for a small country like Oman which is seeking to diversify its production base. However, it is well known that lending institutions are often reluctant to offer loans to small firms because of the nature and size of such businesses. This research study, therefore, is the first to carry out a detailed investigation of the financing of small and medium-sized enterprises in Oman by focusing on the three main sectors in which SMEs function: manufacturing, trade and services. The study aims first to examine the procedures and problems faced by SMEs in obtaining finance by considering the need for finance, the types of finance available, and the difficulties that may be encountered in this process. Guidelines are then offered to encourage the participation of such firms in Oman's development. The study also seeks to examine the relationship between certain characteristics of firms and their owner-managers and the need for finance, together with difficulties encountered when seeking such finance. Finally, a comparison is made of the procedures and problems faced by SMEs in the three sectors. After a literature review, the thesis puts forward, in Chapter 4, the theoretical research framework and a number of hypotheses. Data were gathered via questionnaires and interviews from 397 small and medium enterprises in Oman; 94 from the manufacturing sector, 180 from the trade sector and 123 from service firms. These data were then analysed using the following methods: descriptive analysis, nonparametric testing, and analysis of variance (ANOVA). The findings showed that some significant differences did exist between firms, their owner-managers' characteristics and the need to acquire external finance, as well as the success or difficulties they faced in applying for such lending. The need for external finance for such companies to expand their businesses was also clearly demonstrated, especially in the trade and service sectors, the majority of respondents in all three sectors were aware of government sources of finance. It was found that the main reasons for difficulties in raising finance were high rates of interest, incomplete business plans, a lack of securities, and putting forward proposals considered not to be viable. A detailed analysis of the results can be seen in Chapter 6, with a summary of the main findings in Chapter 7. The study ends with an examination of the implications of the findings of this research for owner-managers, policy-makers, academics and entrepreneurs. Finally, suggestions are made for future useful research in this area.
|
|---|
