The balanced financial structure of firms is not a new issue
in financial analysis. However, the respect of the rule of minimum financial
balance within the context of SMEs, characterised by the rationing of capital,
particularly bank credit, constitutes a new avenue for research. The main aim
of this study is to highlight the breaking of the minimum financial balance
rule by companies and propose ways of financing the long and medium term needs
of SMEs in a context of excessive rationing of bank credit in order to obtain a
balanced financial structure. In order to highlight the sources of financing
for the long and medium-term needs of SMEs, a simple random sampling method was
used. The researcher collected data from two surveys, the first based on the observation
of 100 Cameroonian SMEs, from 2017 to 2023, in which we focus on the
frequencies of the alternative methods of financing the assets of SMEs. On the
data of the second survey performed between 2013 and 2016 on 452 SMEs in
Cameroon, the researcher applied a Logit regression to empirically explain the
probability of the choice of the mode of financing made in the presence of
credit rationing and used the techniques leading to a mode of financing to
highlight the modes of financing chosen by SMEs. The sample was made up mainly
of companies having 9 years of experience (68.6%). They are followed by SMEs
with more than 10 years of survival (28.57%) and those with 5 years (2.85%).
The study results show the following modes of financing: For the first survey,
equity, savings and loan associations (tontines), assistance from friends and
family members, microfinance institutions, intercompany credit, leasing
institutions, and bank credit. For the second survey: savings and loan
associations, microfinance institutions, intercompany credit, help from friends
and family members, contributions of partners, leasing institutions, and the
issue of new shares are found as the main modes of financing. The field study
reveals that the structure of financing of SMEs violates the rule of minimum
financial balance. Therefore, the study proposed ways of enabling SMEs to
comply with this rule and ensure their financial safety. These findings can be
important in line with the Modigliani and Miller, Myers and Majluf, and Quintart
models if the question of the financing of SMEs in the context of excessive
credit rationing is to be addressed.
Author(s) Details
Ndjeck Noé
FSEGA, University of Douala, Cameroon.
Eugène Mohe
ENSET, University of Douala, Cameroon.
Please see the book here :- https://doi.org/10.9734/bpi/ebmra/v1/2939
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