High interest rates and lack of collateral hinder SMEs' access to credit.
Small and medium businesses in developing countries face challenges in getting loans due to issues like high interest rates and lack of collateral. A study in Bahawalpur, Pakistan found that these obstacles prevent SMEs from accessing financial help, hurting their profits. To help SMEs grow, the study suggests that the government should regulate bank policies and make collateral requirements more flexible. Providing entrepreneurs with information on different funding options could also improve the situation.