Corporate finance Essay Example | Topics and Well Written Essays - 2750 words - 1

Corporate finance - Essay Example The important role of SMBs is evident when the economies of the developing nations are considered. SMBs contribute greatly to the gross domestic product in a country, entrepreneurial skill development, generation of employment and innovation to many developing economies. In light of this, the paper will critically analyze the various sources of financing for small and medium scale businesses Due to the good impact of SMBs in the economy of a country, support schemes and programs have been put forth in institutions by some of the developed and developing countries so as to support them (Prasad, C. 2004). This support includes offering loans, expert counseling on the types of credit so as to avoid credit risk, advice and legal assistance on exports by the government of the United States of America through small business administration. For instance, in the late 80s the Nigerian Government established the Entrepreneur Development Programme through the National Directorate of Employment, the objective of this policy was to reduce unemployment level through providing an opportunity for individuals to acquire entrepreneur skills. Further they would be able to secure loans for themselves so that they can start their own small and medium scale enterprises (Dinesh, 2003). Another case was in Mexico whereby the Mexican Development Fund was established so as to provide an arrangem ent of finance to aid agricultural activities. Despite such efforts, investigations reveal that the SMBs are still facing major challenges. Some of the SMBs cannot easily access funds thus posing a major threat to their existence in terms of growth and survival. Ekpenyong and Nyong (1992) states that in some countries like Ghana for example, financial schemes have been launched. They include Micro-finance, venture capitalist trust, and small loan centers among others. Others are export development, Investment Funds and