Abstract:
The SMEs are the engine of National economy and have the role of increase of income of people, employment creation, and intensive labor than large firms and increase the
competitiveness. Despite the role of SMEs in national economy, they have the constraints affecting their development like: Finance issues, lack of managerial skills, lack of equipment and technology, regulatory issues .The fundamental objective of this study is the Evaluation of Loans towards SMEs development. The study population was 2353. The sample size was 100 respondents composed of 96 customers and 4 staff of RIM Ltd. The questionnaire, interview, documentation were used to collected data. Data was analyzed by using SPSS. Based on the findings related to the second objective on contribution of loans in SMEs development, it was revealed that 50.0% confirmed that profitability of business, increase in sales, and increase in stock level, increase of working capital and expansion of business are performances achieved by
SMEs owners. With these findings, the researcher concluded that to get loan from financial institution is significant and necessary for ensure the development of SMEs. For the third objective on roles of SMEs in economic development, findings revealed that SMEs play a role in economic development through the poverty alleviation by creating the jobs, increasing of people’s income and overall living standards, SMEs contribute to the growth of existing business, opening up the new business opportunities, SMEs provide the employment opportunities, SMEs improves income of people and enhancement of competition and entrepreneurship. By these findings, the researcher concluded that the collaboration of people with financial institution is vital because they facilitate to access to finance. Lastly but not least, one can conclude that loans lead to small and medium enterprises development, by using factors that greatly influence development like income of people, education level, and investment level.
In addition, it can be said that the objectives of the study were successfully achieved. Findings and conclusions were found in line with the interpretation of the data. The research was carried out on the role loan in small and medium enterprises development with reference to RIM Ltd customers. The study established a positive significant relationship between amount of loan and SMEs achievement of goals. So the researcher is enables to reject the null hypothesis. The researcher therefore concluded that loans contribute to the SMEs development and rejects the alternative hypothesis.
