Loan Interest Rate Uncertainty and Financing SMEs Listed in Tehran Stock Exchange

The role and importance of small and medium-sized enterprises is controversial not only in developing countries but also in developed countries. Internal and external surveys of small and medium-sized firms indicate that financing is one of the most important challenges. The interest rate uncertainty will also have a significant impact on the financing and investment of these companies. The interest rate uncertainty, which is considered as the cost of rent by the investor and the opportunity cost by the depositor, is one of the most important macroeconomic variables in policy making. Therefore, the present article seeks to explain, after explaining SME financing and its position in the Iranian economy, the role of the interest rate uncertainty on SME financing as a challenge. The main aspects of their development are analyzed using a regression analysis. The statistical population of the study is small and medium-sized companies whose financial data is published in the Comprehensive Database of All Listed Companies (CODAL) 70 selected SMEs during 2011-2017. Generaly, the results show a negative and significant effect of interest rate uncertainty on financing at small and medium enterprises in Iran. Based on the results of this study, it is suggested in order to improve the financing of small and medium enterprises in the country, by reducing the amplitude of fluctuations in the real interest rate, the policies based on reducing interest rate uncertainty should be adopted.