An empirical study on micro, small, and medium enterprises access to finance in Kosovo: A survey based analysis

Abstract

This study investigates the access to finance among Micro, Small, and Medium Entities (MSME) in Kosovo, providing an understanding of the financial landscape of this important sector. Utilizing a quantitative research design, the study administered a structured questionnaire to a representative sample of 250 MSME in Kosovo, encompassing a variety of industries and sizes. The questionnaire measured the types of financing used, perceived barriers to accessing finance, and the impacts of financial constraints on the business.Data analysis included descriptive statistics, inferential statistics, and regression analysis. Findings suggest a reliance on internal funds among most MSMEs, with high-interest rates and stringent collateral requirements identified as major barriers to accessing external finance. Moreover, firm size and years of operation appeared to positively influence access to finance. The study concludes with recommendations for regulatory reforms, financial sector development, and capacity building to ease these barriers and enhance MSME growth and competitiveness.Further research is encouraged to probe the effectiveness of different interventions and delve deeper into the experiences of MSMEs in navigating their financial constraints.

Unlocking Economic Landscape: Understanding the Dynamics of Financial Challenges, Business Traits, Financial Resources, Growth Phases, Financial Accessibility, and MSME Performance

“…This result aligns with the research conducted by (Fowowe, 2017). Additionally, the study conducted by (Berisha et al, 2024) supports these findings, indicating that financial access and credit regulation pose significant challenges to the growth of MSMEs. Previous research has confirmed that financial access has a significant impact on the performance of a company…”

“…Financial access and credit regulation are significant challenges for the growth of MSMEs (Berisha et al, 2024). Companies without credit constraints experience faster growth compared to credit-constrained companies (Fowowe, 2023).…”

“…The loans from moneylenders (FR4) Growth Phases of an MSME (X4) Conception/Development stage (GP1) (Berisha et al, 2024), (Fowowe, 2023), (Kurdi et al, 2023), (Kurdi et al, 2023), (Utama et al, 2023).…”