| Summary: | The goal of this study is to determine whether measures of firm-level corporate govemance, level of personal financial literacy and the lending technologies deployed by banks can predict the SME owner and/or manager's perception of bank credit availability. The study samples Chinese SMEs located in the northwestern city of Xi'an. The study finds that the owners and/or managers of SMEs perceive bank credit availability to be limited. Several estimated models using ordinal logistic regression were able to predict perceptions of bank credit availability. Firm size, bank loan demand, corporate governance and a measure of moveable asset lending were found to be significant predictors of how owners and/or managers perceIve bank credit availability. An important implication ofthis research project is that SME owners and/or managers in search of external fmance should enhance their corporate governance, specifically in the area of disclosure and transparency. The owners and/or managers of firms that score high on corporate governance are more likely to perceive financial obstacles to be low compared with other owners and/or managers. Another important implication is that financial literacy training may be necessary to increase banle credit availability. Education, a proxy for fInancial literacy, provides indirect evidence that financial literacy has a positive bearing on the perception of bank credit availability. Education was found to have a positive effect on corporate governance.
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