Impact of Social and Religious Beliefs on SMEs Intention towards Adoption of Formal Finance: A Proposed Model

Abstract

Purpose: SMEs play an important role towards economic growth by generating employment and alleviating poverty, thus, SMEs importance is more evident in developing countries. Despite major contribution ineconomic development, SMEs around the world are facing several challenges including use of formal finance. This study seeks to investigate the impact of both social and religious beliefs of SMEs owner-managersattitude and their intention towards taking formal finance. Methods: Qualitative inductive methodology has been applied using literature review.Results: This study proposed a conceptual framework to elaborate sociocultural factors of owner mangers influencing SMEs' decision making with application of Theory of Reasoned Action.Implications: Findings of the study will be helpful for the financial institutions to better understand the financial behavior of SMEs owner managers in Pakistan.