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The most important challenge in accessing funds for the small enterprises is that they are small and are more of a riskier investment as compared to the bigger firms. Banks often want certain assets that can be pledged as collateral for the loans which the small firms do not possess. In addition to this if some one provides a loan to a risky business they will also demand a higher return from it. Banks however are not allowed by law to have more then a fixed return from the loans so they prefer to lend to their bigger, safer clients. Small enterprises are affected a lot by changes in the economic situation and this adds to their risk. So the main reason they don’t get loans is that people want to invest their money in a safe place and also get a high return which many small firms can not provide.
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