A comparative study of Small and Medium Enterprise (SME) banking services in Bangladesh and Canada

Abstract

Economy is the key feature to measure the country’s position or condition in terms of its progress and prosperity. The economy of a country is dominated significantly by its own Small and Medium-sized Enterprises (SMEs) in almost all the developed and developing countries around the world. SMEs covered more than 95 percent of enterprises across the world, accounting for around 60 percent of private sector employment. On the basis of economic structure of the countries, the SMEs contribute around 50 percent of global gross value added and from 16 percent to around 80 percent of gross domestic product (GDP). Increasing their funding efficiency and service provided by the banks or financial institutions offer considerable value for SMEs themselves as well as economies. Worldwide the SMEs are considered as accelerated tools for economic growth. In the European Union, SMEs employ almost 90 million people, generate about 1.1 million new jobs per year and contribute almost 30 percent of GDP, worth USD 5.5 trillion. SMEs also drive revolution. They carry out nearly more than half of R&D in some OECD countries. Great deals of R&D activities are concentrated in the services sector and Canada's activity in non-technological advance is reflected in the trademark data. SMEs also play a vital role in R&D. This study focuses on the association and variability of small and medium sized enterprises (SMEs) in terms of deferent parameters between two countries Bangladesh and Canada. Specifically, it examines the impact of banking services on SMEs between two deferent economies. It looks at the financial enabling environment for SMEs and provides conclusions and recommendations for change. To improve the precision of the judgments in this research, methodological triangulation strategy, which mixes both qualitative and quantitative approaches, was employed. At the same time, data-source triangulation was applied to decrease the effect of potential biases. The study is divided into six (06) distinct chapters. First chapter contains the economic status of the countries, SME definition and SME development policies. In second chapter, methodology of the study is explained. Literature review is placed in the third chapter. Fourth chapter explains the role of SME, problems of SME and eligibility criteria for SME loan in Bangladesh and Canada. Chapter five is the core chapter in our study. Fifth chapter is divided into two parts (Part-1 and Part-2) for two countries. Part-1 contains the deferent numerical analysis for Bangladesh and part-2 contains the numerical analysis for Canada. Discussion and conclusion are placed in the last chapter.