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Lecture 1: Introduction

1.1 Introduction to Access to Financing for SME Exporters

1.2 Orientation
1.3 Introduction to Access to Financing

Watch the video:

www.youtube.com/embed/rTN-zejYkgc?rel=0
1.4 Introduction to the lecture
1.5 Question 1

Feedback:

In fact, all of the obstacles are truthful.

These key obstacles prevent SMEs from obtaining the financing needed to boost their business activities.
1.6 SME challenges in accessing financing

Enterprises face considerable obstacles to growth in developing and emerging countries.

Insufficient financing, both in terms of debt and equity from any source, is one of the main
obstacles to enterprise growth. The World Bank’s 2012 Global Enterprise Survey shows that 44%
of entrepreneurs identify access to financing as one of the major obstacles facing the
development of their enterprise. Figure 1 shows the responses to this survey.

Figure 1: Major Enterprise Development Obstacles According to Entrepreneurs

Without access to financing, enterprises can neither be established, nor invest in their growth.
Without the establishment of new enterprises and increased growth investment, productivity
cannot increase. In a closed cycle, this results in slower turnover and labour demand, and thus,
ultimately, in slower trade flows. Together with other factors such as the provision of electricity
and of a favorable enabling environment, however, sufficient access to financing allows
enterprises to prosper.
1.7 Obstacles to financing
1.8 Overcoming barriers improve access to financing
1.9 Overcoming the barriers to improve access to financing - summary
1.10 Estimating the financial needs of SMEs
1.11 Components of financial needs
1.12 Working capital needs (short-term financing)
1.13 The working capital cycle: time and money

Note: this animation is not available in the offline version of the lecture.
1.14 Sources of financing

Feedback:

All the options are correct. Different financing sources are available on financial markets, which will be shown on the
next slide.
1.15 Sources of financing
1.16 Determining the sources of financing
1.17 Match the sources of financing with their respective financial needs

Feedback:

Venture capital is the most suited source of financing for start-ups, which are usually high risk.

Projects of such length as 3 years call for longer term financing, such as a long term bank loan.

A short-term need for working capital, as the name implies, can be fulfilled by a short term bank loan.

Finally, government grants are most suited for fields in which financing is subsidised.
1.18 Match the descriptions with their respective financial products

Feedback:

Leasing is a transaction in which an enterprise obtains assets in exchange for periodic payments.

Equity based financing refers to the purchase of equity positions in enterprises with high growth potential.

Factoring refers to the purchase of an enterprise's accounts receivables in cash on a regular basis.

Short-term loans refer to loans that have a maximum maturity of one year.
1.19 Key Points

Watch the video:

www.youtube.com/embed/-FVUH6FnXrc?rel=0
1.20 Thank you for completing the lecture