Abstract:
This study caters to identify the Factors that hindering small and medium enterprises for
committed and consistent credit repayments by focusing on small and medium enterprises in
ISLAMABAD PAKISTAN. The specific objectives are to identify the major factors and problems of
SMEs facing for credit repayments and to identify difficulties related to assessing the loan from
banks and others private credit unions. Besides this study also determinehow these factors
effect small and medium enterprises development and sustainability. This study adopts a
survey design method in determining the factors that affect small and Medium Enterprises in
credit repayment. Its target population comprises of SMEs operating within Islamabad‐the
Capital of Islamic Republic of Pakistan. This study is utilizes a sample of 100 SMEs within
Islamabad.
The study found that independent variable (Education of the SME enterprises, Age of
SME, SME Size of Assets and Income, Interest rate, Loan size and repayment period) explains
68.7 percent change of credit repayment. In this study Researcher Found that most of
Respondents (small and medium enterprises) Operating/ have bank account and that was the
main reason to borrow 44% credit from the banks for Start‐up, Buying Assets, increasing Stock
and development. It found that the main reason for failure of credit repayment is due to loans
given out without any form of security, Capacity and characteristics to clients. It recommended
that those small and medium enterprises should have a structure where funds are well
projected over the period of repayment and portion money for such repayments. In this study
researcher found small and medium enterprises unsatisfied with the performance of the
Government of Pakistan, Banks and private credit institution and they thought that these
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aspects can contribute toward the Economic and Financial development of small and medium
enterprises in Islamabad‐Pakistan.
