Determinants of Small Business Lending in Palestine.

This paper aims to determine the factors that drive banks and other financial institutions' decisions to provide loans to small and medium enterprises' owners specifically in Palestine. In order to achieve the study aim six banks and four micro finance institutions have been chosen for the period of 6 years (2008-2013). Loan guarantee fund programs and donations, business size and inflation were used as independent variables that influence banks or MFIs lending decision. To drive the end results, regression analysis is used. The findings illustrate that selected variables such as asset size have higher impact on both banks and MFIs lending decision, while inflation have no any significant impact on banks but negative impact on MFIs. The funding programs and donations have positive impact on banks and MFIs respectively. The study is equally useful for SMEs and bank owners to understand the factors influence on SMEs loans. [ABSTRACT FROM AUTHOR]