Impact of lease finance on performance of SMES in Pakistan

Lease finance decision is one of the major decisions in the organizations because it affects the whole organization. Organizations need funds to operate successfully and conveniently in accordance to meet the financial requirements. Lease finance is one of the critical things which is included in the strategies of the organizations. This research article tried to assess and evaluate the impact of lease finance on the financial performance of the SMEs in Pakistan. Return on Assets (ROA) and Return on Equity (ROE) are evaluated in order to assess the performance of the organization in accordance to financial health of the organization. Content analysis is used with the help of a questionnaire. Total number of SMEs is 52 which will be the population for our research study. Pakistani entrepreneurs of SME's are the respondents for our research article. The association of lease finance and financial performance of the organizations is measured by using cross-sectional data. On the basis of regression results it has been observed that there is a positive and significant association between Return on Assets (ROA) and lease finance. There is positive and significant connection between Return on Equity (ROE) and lease finance. It is clear from the results that lease financing has enhanced the performance of the SMEs in Pakistan therefore it is recommended the it should be involved more habitually in SMEs of Pakistan.