Paper Title
Determinants of SME Access to Bank Finance

In this paper, we model the determinants of successful bank loan applications to Bank Al Tanmeyaby small and medium-sized enterprises (SMEs) in Libya. The posited determinants of successful bank finance include firm size (in terms of employment), the business sector of operation, the age of the business, and the age and level of education of the owner– manager. All other things being equal, we find that older firms, more educated managers, and firms with a strong banking relationship are more like to be granted loans, while older owner–managers, larger firms, and firms in the services industry are less likely to be granted loans. The presence of business plans and attendance at training workshops appears to have little influence on whether loans are granted. These findings suggest that banks loans in Libya are largely made on the strength of the relationship between the bank and the SME rather than the financial statement-, asset-, or credit scoring-based approaches to bank lending found in more developed economies with stronger banking sectors. Index terms - Bank finance, Small and medium-sized enterprises, Firm factors, Owner–manager factors.