Though SMEs have low accessibility to institutional credit, this accessibility may reduce the cost of capital. Therefore, this study explores field level status of accessibility of SMEs to institutional credit along with finding out the causes of low accessibility. Descriptive statistics, accounting and financial techniques, and a logistic regression model are applied to analyse the data. This study finds a demand and supply gap of SME credit. Moreover, SMEs have to bear some additional costs besides the interest of institutional credit. Banks are more conscious regarding their loan’s safety and security in the SME sector. Therefore, SMEs are facing difficulties in getting access to institutional credit. Again, SME entrepreneurs are not concerned regarding the interest rate of institutional credit, which ensures that the entrepreneurs are capable enough to earn more than the cost of institutional credit. By the study’s findings, respective government authorities, Bangladesh Bank, banks, other financial institutions and SME entrepreneurs can get a guideline to enhance the credit flow in the SME sector.
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