Tag Archives: debt financing

Public Debt Management in Bangladesh: An Analysis of Debt Portfolio Perspective (Published)

The study has been illustrated to investigate the public debt management in Bangladesh special reference to debt portfolio perspective over the period of 2005 to 2016. Debt portfolio analysis has been constituted in various approaches including source of financing, multiple instruments, interest rate, currency composition and so on. Some figures, tables and facts have been utilized in each case of analysis. According to analysis total debt stock from external sources are decreasing during the study period and in case of domestic sources, banking sector contribution is also decreasing from 60% to 48% whereas National Savings Certificates (NSC) is exhibited to 19% in 2012 and then rose sharply to 27% in 2016. But other domestic sources (Treasury Bonds, Treasury Bills) were more or less remained constant during the study period. It is not fair indication for overall debt financing because of higher interest rate of NSC. However, from 2019-20 financial year, government has taken many pragmatic steps in capping the problem introducing online database for NSC.  In contrast, interest rate in both domestic and external cases is around 97% fixed. In the case of currency composition, 60% debt financing is accounted in local currency whereas XDR and USD were around 28% and 8% respectively. After all, total debt in Bangladesh is visualized below around 4% of GDP growth and total debt is about 31% of GDP during the period.  From the debt sustainability point of view, it is eventually a good indication that there is no major risk involved for debt financing.

Keywords: National Savings Certificate (NSC), debt financing, debt portfolio, debt sustainability

THE CHALLENGES BEHIND SMES’ ACCESS TO DEBTS FINANCING IN THE GHANAIAN FINANCIAL MARKET (Published)

Despite the fact that financial institutions have identified the SME sector as a fast growing sector in the country, there are several constraints serving as bottlenecks to SMEs in accessing finance from financial institutions. This study examines difficulties SMEs face in accessing loan, difficulties financial institutions face in lending to SMEs and the impact of loan on the profitability of SMEs. In conducting this study, questionnaires were administered to SMEs. Credit officers in the selected banks were interviewed. The following major findings came to the fore; Interest rate on loan to the SMEs is extremely high, Repayment periods on loans to SMEs are too short making it very difficult to embark on any developmental or expansion projects, most SMEs, do not understand terms and conditions, and also oblivious of the interpretation of the percentage charged on the loans. It was also found out that small business owners normally give false information when accessing loan from financial institutions. The study suggested that government should institute some form of tax incentives to financial institutions involved in SME lending and formulate regulatory laws to help loans recovery. SME associations must be established to unite them and serve as guarantors whenever loans are accessed.

Keywords: SME, debt financing, financial institutions