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Give reasons Why It May Be Difficult For Small Companies To Raise Debt Finance In Kenya.

Give reasons Why It May Be Difficult For Small Companies To Raise Debt Finance In Kenya.

Answers

Kavungya
• Lack of security
• Ignorance of finances available
• Most of them are risky businesses as there are no feasibility studies done (chances of failure have been put to 80%).
• Their size being small tends to make them UNKNOWN i.e. they are not a significant competitor to the big companies.
• Cost of finance may be high – their market share may not allow them to secure debt.
• Small loans are expensive to extend by bank i.e. administration costs are very high.
• Lack of business principles that are sound and difficult in evaluating their performance.
Kavungya answered the question on March 11, 2019 at 13:35

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