Financing of SMEs-The Case of Pakistan's Cotton Ginning Industry

The present study is an attempt to identify the financial issues of SMEs of Pakistan. Pakistan's cotton ginning industry has chosen as a case. The general objective of the study is to analyze the financing issues of the small-scale industries with appropriate alternatives and financing solutions. The extensive theoretical framework about financing of SMEs along with seven hypotheses (for testing) has been included in research work as base of study. Both qualitative and quantitative research methods have been employed for the research work. Statistical data analysis techniques are used to analyze the data which was collected through questionnaire's survey from SMEs and the results have presented with hypothesis testing. The findings of research work indicates that high interest rate on loans, heavy taxes, poor government policies, owner's education level, old technology and poor legal and accounting self-efficacy are the major reasons of financial problems.Soft and friendly government policies, short and long term loans at lowest interest rate for running and technology up-gradation are recommended.Joint ventures are found to be the most suitable alternative for financial solutions.