How important it is access to credit and other financial services to growth and investment / Abdulla Imraan

Abstract

This study examines how important it is to accessed credit for investment and growth of businesses. Similarly, this research identifies main challenges face to borrowers and bank in securing credit. Further role played by financial institution in the development of business. A questionnaire or survey form is circulated to 50 participant's and interviews are performed to collect data. The data were analysed using ANOVA, correlation, fisher exact test, regression etc. Information are presented in tables and various charts because it will be easy to follow as well as easy understand. Finding reveals several challenges which were commonly perceiver by banks and borrowers. Banks face difficulty as a result of changing inflation and foreign exchange. Borrowers face challenges in accessing credit because of high interest rate, lack of collateral, lack of awareness, no proper business plan. Further results show a strong relationship between accessibility of finance and growth of investment. Therefore, challenges face in accessibility of credit, in this case Bank of Maldives has strongly impact on investment and growth of the business hence research hypothesis is satisfied. The study concludes with some recommendation to help both business and BML. The recommendation is encouraging bank to facilitate credit facilities to businesses and take initiative in developing businesses since it ultimately help to expand operation of bank as well as economy. Some of the supports are reducing collateral requirement and flexible repayment mechanism. Further several recommendation has given to business in order to access credit more easily, such as maintain financial records appropriately, maintaining a good credit history and formulating a proper business plan which demonstrate short term as well as long term objectives. As per information building trust with lender and borrowers has a high chance of attaining credit.