Determinants of Unconventional Financial Sources Take Up: A Study of Small Scale Industries

The aim of this paper is to understand why Small Scale Industries choose to finance their fixed asset investments by unconventional financial sources. We examine enterprise level determinants of this choice. Data on unconventional financial sources take up of 200 small enterprises areextracted from the Survey carried out with structured questionnaire, which enable to study with wider data. Our results address financial constraints insist entrepreneurs to chooseunconventional financial sources. Moreover firm size, owners’ gender and location are important firm level factors affecting firms’ reliance on unconventional financial sources. Finally financial development level in the country has significant impacts on decreasing unconventional financial sources take up.