The Determinants of the Choice of Alternative Financing Methods of SMEs in Bank Credit Rationing: Evidence from Cameroon

Abstract

Using a method of funding is not accidental. It is based on factors of choosing a financing method. However, these factors do not all exert the same influence to lead to a type of financing, especially in the context of Small and Medium size Enterprises (SMEs) in a situation of bank credit rationing like those of Cameroon. Thus, the results obtained from a sample of 452 SMEs in Douala, Cameroon, through a logistic regression model, revealed that factors such as the cost of financing, the power dilution and the financial flexibility are at least three times more likely to guide the SMEs to short-term financing than to the long and medium-term ones.