The Financial Market and the Difficult Financing of Small and Medium-Sized Enterprises (SMEs) in The Republic of Guinea

Abstract

Generally regarded as a development priority because of their contribution to the fight against unemployment, which has plagued developing countries for decades, SMEs experience financial difficulties throughout their process, i.e., from the start-up process to the production stages and marketing. This difficulty of access to finance for SMEs is often questioned by our predecessors in management sciences and economics. In the Republic of Guinea, SME financiers are constantly faced with many problems in funding their activities. Through case study methodology and review of data and reports from agencies like the Promotion of Private Investments (APIP-Guinea), World Bank, and the International Monetary Fund, our present study found that the refusals of Guinean SMEs to finance are often due to a lack of equity - a bottleneck for 90% of Guinean SMEs. There is also a lack of financial information on the part of these SMEs. This situation forces SMEs to fail prematurely due to the risks of short-term over-indebtedness, which can only be resolved if financial intermediaries agree to revise their criteria for granting credit that has hitherto harmed Small and Medium-sized Enterprises (SMEs).