Asia Pacific University Library catalogue

A thesis submitted in fulfillment of the requirement for the award of the degree of Master of Finance (UCMF1808DSBA)

Financial decisions-making to access financial sources from external is very important for the sustainability growth and profitability of small and medium-scale enterprises sector. This study aimed at investigating the factors influencing financing decisions to SMEs in Damascus, Syria. The study employed both quantitative and qualitative approach to arrive at the findings and conclusions. The study conducted a survey with involving 200 SME owners and respondents. It examined how financial performance, legal form and credit ratios (5Cs of credit) affected financing decisions of SMEs in Syria. The study found that credit ratio and financial performance significantly affected SMEs' financing decisions making. Legal form of SMEs also showed a positive relationship with financing decisions, but the relationship is not so strong significant to influence financing decisions. Based on these findings, the research recommended that SMEs increasing cash flow by working on the move of inventory turnover and maintain an adequate percentage of liquid reserves as a catalyst where they will be make financing decisions more effectiveness and it will be able to cover interest and loan installments if borrowed. Besides that, the owners and managers should develop appropriate business plans that show where their borrowed funds will be channeled, and how frequent revenues will flow from the investments of the business, through it the lenders will see enthusiasm as well as they can see the business profitability. Moreover, the study recommends focusing on policies collateral to SMEs as the main challenge it faced when make financing decisions. Also, the government should focus on economic stability, which in turn helps maintain the stability of interest rates to become accessible to all SMEs.