The unavailability of external financing and lack of access to formal finance are
topics of significant research interest to academicians and important issues to
policy makers around the globe. However compared to large firms, SMEs
frequently tend to report financing as a major obstacle. The financial
constraints of SMEs to access to finance are beyond question by many
researchers. Thus, this study attempts to discuss the factors that lead to
influence financial institutions in lending technologies to provide finance to
SMEs in Malaysia. The methodologies on the relationship between the
requirements of financial institutional and the type of lending technologies
provided for SMEs is illustrate. This conceptual paper is aimed to improved the
theoretical parts of analysis, on the factors influencing Financial Institutions on
lending technologies to technology-based SMEs in the northern region of
Malaysia and identify the challenges issues regarding the requirements of
financial providers based on the lending technologies adoption, be it transaction
lending or relationship lending. Furthermore, the methodologies will also be
able to assist researchers to get more iriformation on the unique needs for
finance of SMEs and tailor the finance providers' requirements to be SMEs
friendlier i.e. better meet SMEs ability and needs in order to achieve win-win
situation.
