Bank Financing to Small and Medium-Sized Enterprises in Palestine: Assessment of Prospects and Limitations from a Strategic Planning Perspective رسالة ماجستير

Abstract

The study aimed to assess the impact of strategic planning for the main parties that motivating banks to providing financing to SMEs in Palestine; by exploring the extent of strategic interest of the banking sector, and the Palestinian Monetary Authority (PMA) to supports SMEs through directing bank financing to these projects through their applied strategies. In addition, the study aimed to assess the strategic planning of SMEs and their eligibility factors to obtain the required bank financing from the perspective of the banking sector. The problem of the study lies in the low percentage of providing bank financing to SMEs compared to other sectors for the period from - . The study relied on the historical method to follow the previous literature, in addition to the descriptive method to describe and analyze the phenomenon under study in the theoretical aspect. As for the practical aspect, the study relied on the analytical statistical method by using the SPSS program. The study found that there are strategic directions for the supervisory authorities (PMA), and for the banks operating in Palestine to direct bank financing towards SMEs. The strategic directions of banks to directing credit to SMEs is linked to reducing the SMEs loans risks, and is also linked to the availability of eligibility factors for those projects to obtain the required bank financing. The study recommended to holding training courses for SMEs owners, through the establishment of training and development centers to raise the skills of SMEs owners, and this reduces risks of Bank financing for SMEs. The study recommends to: holding a Governmental encouragement to banks by providing banks free or reduced interest loans, preferential tax transactions or tax exemptions in return for increased lending and risk taking on SMEs financing. Forming government guarantee funds with government capital with a coordination between government and PMA, taking into consideration a reduced guarantees commission, in order to avoid increasing lending costs for the financed SMEs. Involving civil society institutions, in coordination with the PMA, in informing society of the importance of the national plan for financial inclusion to enhance financial and banking culture, through periodic programs and courses that targeting different segments of society and not only through the media. Activating the performance of the PMA in linking SMEs with banks through programs that provide soft facilities to the SMEs, which VI encourage SMEs to start dealing with banking services. Motivating banks to financing SME through the special supporting programs to support SMEs by paying the interests of loans provided to SMEs from those programs. In addition, the study recommends to conducting a future research regarding the assessment of the demand sides for bank financing to SMEs in Palestine