THE EFFECT OF LEASE FINANCING ON COMPETITIVENESS OF SMALL AND MEDIUM ENTERPRISES IN NIFAS SILK LAFTO SUB CITY

Abstract

The purpose of this study is to identify the effect of lease financing on competitiveness of small and medium enterprises in Nifas silk lafto sub city. The independent variables lease charge flexibility, loan size, collateral requirement, loan repayment period, tax benefit, leased asset management and lease financing policy and procedure; are regressed against the dependent variable competitiveness of small and medium enterprises. The study employed explanatory research design and multiple regression models to show the effect of the independent variables on the dependent variable. The study used primary data collected from respondents of employees and owners of small and medium enterprises. The respondents were 200 employees and owners of small and medium enterprises in Nifas silk lafto sub city. The data is analyzed by using STATA14. The regression result shows that lease charge flexibility, leased asset management, loan repayment period & loan size are significant determinants of competitiveness of small and medium enterprises while tax benefit and lease financing policy and procedure are not significant determinants of competitiveness of small and medium enterprises. The researcher recommends small and medium enterprises to use lease financing since it improves small and medium enterprises competitiveness.