Networking by External Support Agencies and Financial Institutions.

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Abstract
DAVID DEAKINS IS DIRECTOR OF THE Enterprise Research Centre at the University of Central England, Birmingham, United Kingdom, and senior lecturer in economics. Toby Philpott is lecturer in economics at Staffordshire University, United Kingdom. Studies of networking between firms have revealed benefits to SMEs which can rely on their network of contacts for advice, support and finance. There has been less concern with the advantages of networking between financial and professional institutions and support agencies. A number of research studies are combined to make a comparative study of the different financing arrangements, practices and networking in two regions: the West Midlands in the UK and Baden-Wurttemberg in Germany. Networking in Baden-Wurttemberg revealed benefits in financing arrangements and practices for SMEs compared with practices in the UK The IHK or local chamber of commerce played a key role in co-ordinating support and promoting alternative sources of finance in Baden-Wiirttemberg. In addition, bank practices of risk assessment benefitted from this closer networking. Greater networking in the UK would improve practices of risk assessment, enabling the benefits of greater specialisation of staff to be realised, and improve the profiling and awareness of alternative funding schemes to specific types of small firms, such as new technology small firms, that have particular financing requirements that are not being met by existing institutions.

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