The multilevel gray evaluation of financing risk on small and medium enterprises

The role of small and medium enterprises (SMEs) has been crucial in developing countries´ process of economic reform. Nevertheless, some bottlenecks and obstacles appear for further growth of SMEs, especially with respect to financing. SMEs use less formal finance than large firms in all countries, since they are younger and subject to more growth uncertainty than large firms, especially in developing countries. This paper applies multi-criteria methodology to evaluate the financing risk on SMEs. Firstly, this paper sets up a multi-hierarchy index system. Secondly, it confirms the weight of every index with AHP and gave a general assessment by means of a grey clustering method. Finally, a case study is conducted to validate the evaluation model and the evaluation process.