A dissertation submitted in partial fulfillment of the requirements for the degree of bachelors in business management and entrepreneurship BBME Malawi College of Accountancy 2015 CH2239

This study focused on investigating on the challenges that SMEs have in accessing finance from commercial banks in Malawi. The study has concentrated on two banks in Malawi, National bank of Malawi and standard Bank Malawi. Three SME owners were interviewed, the owners of Everest Tracking, Greenland Cleaning Services and Status Carpeting.
The researcher used questionnaires and structured interviews to investigate on the above topic.
The research was conducted in the district of Blantyre.
This research found that indeed SMEs face challenges in accessing finance from commercial Banks. In Malawi, there are twelve banks but of these, only two were studied. These two have clear indication that are harsh when releasing loan to SMEs. The problem has been found to lie on the grounds that most SMEs lack proper education and training before venturing into business. As, such they tending to use business finances for their personal use. Recommendations were made by bank officials who included an implementation of a training system for all SMEs in their respective fields. SMEs were also interviewed and they have their opinion on the issue. It was observed that SMEs banks complained of not receiving enough support from the banks. According to the SMEs banks demanded a lot from them before the release of a loan. SMEs also complained of very high lending rates in the country and the difficult economic conditions in Malawi. Their recommendations were Government should intervene on the matter especially the reduction in lending rates and that banks be fixable in issuing loans. The biggest limitation of the study was time; the researcher was going to interview Government officials and officials from bankers Association to understand their policies on the development of SMEs.