Factors Influencing Accessing to Credit Facilities

Collateral
Not having Types of collateral required
collateral is a mandatory requirement in accessing finance
SMEs very worried about collateral in accessing finance
Lack of collateral affects access to finance
I have ever been denied credit because of collateral complications
Collateral requirements are very stringent
Collateral should be fronted as one of the main requirements
Maximum credit accessible is dependent on collateral
Collateral requirements discouraged my interest in accessing credit
Firm Characteristics
The age of the firm
Having business skills
Ability to compile financial records and accounts

Awareness of having Funding Opportunity (Availability of Finance)

Availability of information on who is offering credit facilities
Performance of Commercial Banks and micro finances
There is an Accessible ways of financing for SME
Past experience in obtaining loan finance successfully

Cost of Borrowing
charged higher interest rate by banks and MFI
Lack of reputation and contact in the banking market
Lack of information and knowledge in method or ways of financing

Demographic Factors
Gender
Age
Level of Education
Years Worked in the Organization
Experience in Accessing Credit/Effects of Access to Credit
It is very difficult accessing credit
I have only received a loan from a bank where personal contacts
existed
prefer personal loans from family and friends
consider loans from banks or other financial institutions as being
expensive
I had undergone bankruptcy before starting the current enterprise
Entrepreneur’s Characteristics
Through networking I have been able to access credit
Appling a loan as a group is easy because I can get co guarantors
Use of political ties helps an entrepreneur access finances
The level of education/ training one has affects in accessing finance
Banks consider the training and skills one has to access credit
Banks prefer women to men when issuing credit
INTEREST RATES
INTEREST RATES in Uganda are very high
Amount of interest paid on loan sways credit access
Banks set their interest rates on the basis of the Central Bank Rate
INTEREST rates should be uniform across banks
loan repayment period impacts access to credit and increases interest

Age of SME
My business' age has ever been a contentious issue for credit access
no credit history of the SMEs is a credit access challenge
Credit history determines credit worthiness
A firm's financial management experience can determine its credit
access
Profitability
Credit raises asset levels and productivity
Credit greatly increases sales revenue and profits
Credit improves market expansion rates
Credit improves diversification ability and facilitates product
development
Management & Experience Factors
Limited skill and management capacity
Lack of clear division of duties and responsibility among employees
Poor organization and ineffective communication
Lack of well trained and experienced employees
Lack of low cost and accessible training facilities
Lack of strategic business planning
Poor selection of business type
Financial Factors
Inadequacy of credit institutions
Shortage of working capital
High collateral requirement from banks and other lending institutions
High interest rate charged by banks and Other lending institutions
Poor management of working capital
Unplanned withdrawal of cash for personal use
Loan application procedures of banks and other lending institutions are
too complicated
Working Place Factors
Inadequate working premises
Absence of own premises
Current working place is not convenient
The rent of house is too high
 Access to finance
available working area & sufficient nputs
I

sufficient inputs &labor force

availability of working area, sufficient inputs, labor force & innovative
technology
labor force & access to market
Simplicity of loan criteria of MFIs
Assets, property, profit and saving

Microfinance programs most liked by clients

low interest rate, rearranging loan size & training
low interest rate, rearranging loan size & individual loan
Long process of loan supply, high interest rate & low amount of credit size
Long process of loan supply & high interest rate
High interest rate, loan supply by group and low amount of credit size

lack of credit worthiness information about SMES is a factor that limits

most types of lending

Management / Character
Knowledge of the business experience and past projects
Past repayment records, reputation and commitment to business
Key management and business style
Succession plan, age and health

Financial / Capacity
The capacity and ability of the business to repay loan
Primarily from the generation of sufficient cash flow
Other sources of repayment

Security offered to compensate/mitigate weaknesses in the above for

credit factors