THE FACTORS AFFECTING THE CHOICE OF BORROWING METHODS FOR SMES IN HEBEI, CHINA

Abstract

In contemporary society, with the sustainable economic development and the fierce competition among the SMEs, it was imperative to help small and medium-sized enterprises to relieved the problem of borrowing issues. This study focuses on re-verify the factors that influences of the choice of borrowing methods for SMEs. Also in this research the researcher identify the influencing factor in order to provide SME with a clear basis for borrowing methods. The research use the quantitative method, which approached of 120 questionnaires were distributed to respondents of the SME’s in China. The respondents are employees of small and medium enterprise. The returned answered of the questionnaires distributed were using SPSS software. Factor analysis and reliability testing were conducted to test the reliability of the reliability of the question before proceeding in analyzing the data. In order to reverify the relationship between the dependent variables and the independent variables, regression analysis was used.

Based on the outcomes of this research, borrowing maturity, borrowing cost and borrowing risk was found to be significant and all of them has positive influence on the SME’s borrowing methods. The author concluded the research with recommendation based on the hypothesis.