What Types of Small and Medium-Sized Businesses are Utilizing New Financial Products?

Abstract

The increased diversification of fund rising methods among small and medium-sized businesses has been a major policy challenge in recent years, and private financial institutions are proactively striving to disseminate new financial technologies. However, this does not necessarily mean that every small and medium-sized business benefits from such technologies. It is difficult to analyze this aspect based on ready-made data. Fortunately, this paper can analyze the current status and challenges of the utilization of new financial products among small and medium-sized businesses by using unique survey questionnaires (Kansai RIETI Questionnaires). The results of responses from more than 2,000 companies showed that most companies began utilizing new financial products due to introductions by main banks, and it was seen that the diversification of fund rising methods among small and medium-sized businesses has developed as a result of efforts made by policy-making authorities and financial institutions. However, the rate of utilization of each financial method is as low as a few percentage points, and extremely small businesses or cash-strapped companies has not improved in terms of fund risings. Improved diversification was mainly found in excellent small and medium-sized businesses.