• Lack of security
• Ignorance of finances available
• Most of them are risky businesses as there are no feasibility studies done (chances of failure have been put to 80%).
• Their size being small tends to make them UNKNOWN i.e. they are not a significant competitor to the big companies.
• Cost of finance may be high – their market share may not allow them to secure debt.
• Small loans are expensive to extend by bank i.e. administration costs are very high.
• Lack of business principles that are sound and difficult in evaluating their performance.
Kavungya answered the question on March 11, 2019 at 13:35