Barriers confronting small and medium-sized enterprises in accessing finance in Comoros

Small and medium-sized enterprises (SMEs) are central to employment and economic activity in the Union of Comoros, yet their growth is persistently constrained by limited access to formal finance. This study examines the barriers SMEs face in obtaining credit from financial institutions and assesses how these constraints affect their operations and growth prospects. Using a descriptive research design, primary data were collected through structured questionnaires administered to 80 SMEs in Moroni, the capital city of Comoros. The analysis, informed by credit rationing and information asymmetry perspectives, reveals that most SMEs are denied formal credit due largely to strict collateral requirements and high interest rates. Notably, relatively strong turnover levels do not necessarily translate into improved credit access, forcing firms to rely on non-bank financial institutions, personal savings, and informal sources, particularly at the start-up stage. Loan facilities available to SMEs are predominantly short-term, placing additional pressure on cash flows and limiting long-term investment. The study concludes that these financing constraints significantly restrict SME growth and weaken their contribution to economic development, highlighting the need for targeted policy and institutional reforms to improve access to finance in Comoros. Keywords: Small and Medium-Sized Enterprises (SMEs), Access to Finance, Credit Constraints, Financial Institutions, Small Island Developing States, Informal Financing, Union of Comoros.