The effect of firm characteristics in accessing credit for SMEs

Small and medium-sized enterprises (SMEs) play an important role in socio-economic development. Despite their significance, the failure rate for SMEs is considerably high, especially in developing economies. Among the widely pronounced reasons for the high failure rate is non-availability of external financing. This study examines various firm attributes that affect access to credit using a sample of 970 SMEs that operate across nine provinces of Mediterranean and Southeast Anatolia regions in Turkey. The results suggest that asset size, sales volume and stability, export rate, and legal form are important determinants of satisfaction with bank products and services. These results are consistent with the hypothesis that larger firms with high and stable sales revenues are more likely to have better access to and therefore benefit more from credit services offered by their local banks.