Professional Documents
Culture Documents
of Brunei Darussalam
1. Aims and objectives of the project
Collect information on financial gaps in the SME, sector in
Brunei Darussalam.
Assess the impact of government-support programs on Brunei
SME sector.
Develop the innovative financing programs for Small and
of
SMEs
contribution
to
growth.
Financial
and
institutional
Overdrafts
Grants
Term loans
Asset finance
Asset-based finance
Equity finance
the lending environment is more important than the firm size or bank
ownership type in shaping bank financing to SMEs.
SMEs are disadvantaged in raising financing compared to large firms and
often face difficulties in signaling their creditworthiness. Empirically,
failure rate are notably higher for SMEs. Large businesses have a greater
pool of financial and managerial resources to survive critical periods.
Furthermore, agency and asymmetric information problems may be more
pronounced for small firms. As a consequence of the persistence of an
equity gap for small businesses, the bulk relies for external funding upon
bank debt. However, regarding bank loans, SMEs find themselves again in
a deprived position compared to large firms. Small firms are more
constrained in the use of control mechanisms, as collateral, long-term
relationship and reputation, which ease information problems. For
instance, collateralization may under some circumstances contribute to
attenuate credit-rationing problems. The younger and smaller a firm, the
less it is able to pledge collateral.
Furthermore, SMEs usually are less capital intensive than larger ones. The
intangibility of the assets, an important characteristic of start-up and
small firms, also impedes this control mechanism. Pledging personal
collateral in the form of a guarantee offers only a partial solution as it is
limited in supply. Despite the fact that SMEs generally lack sufficient
collateral, lending to SMEs is more often based on pledging collateral. In
order to empirically study our research question,
There are also government assistance programs that help with access to
finance. SMEs are vulnerable and very few manage to survive more than
five years. Public authorities throughout the world, perhaps recognizing
both the importance and frugality of the SME, have created agencies and
set up numerous business support and assistance measures to help the
sector obtain better access to finance and to encourage business
formation. These government programs generally focus on specific
industrial sectors such as manufacturing, agriculture, mining different
types of business activities such as export, innovation, research, and
reduce
its
dependence
on
resource-related
wealth
by
are
confronted
with
greater
difficulties
in
cash
flow
2014
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2015
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