Raghu Bir BistaKhanal, Sambridhi2026-05-182026-05-182024https://hdl.handle.net/20.500.14540/26733Small and medium-sized enterprises (SMEs) are pivotal to Nepal's economy, driving economic growth and job creation. However, they frequently encounter challenges in accessing credit, which limits their ability to expand and develop. This study investigates the factors influencing credit accessibility and SME performance in the Kathmandu Valley, Nepal. The objective was to analyse how collateral security (CS), presence of lending institutions (PLI), literacy levels among SME owners (LL), and interest rates charged (IRC) impact credit accessibility and subsequently influence SME performance. Data was collected through a semi-structured questionnaire administered to 300 SMEs in the region. Correlation and regression analyses were employed to examine the relationships between these variables. The findings highlight that CS significantly enhances credit accessibility (CA) for SMEs in Kathmandu Valley, emphasizing the importance of robust collateral for securing credit. Conversely, PLI did not show a statistically significant impact on CA, suggesting limitations in institutional support for credit access. LL among SME owners exhibited a marginally significant positive effect on CA, indicating that higher literacy levels could facilitate better credit access strategies. IRC demonstrated a strong positive association with CA, implying that higher interest rates are linked to greater credit accessibility for SMEs in the region. The study concludes that improving collateral security mechanisms and enhancing financial literacy among SME owners are critical steps to enhance credit accessibility in Kathmandu Valley. Policies aimed at reducing interest rates or providing subsidized credit could further improve SMEs' ability to access affordable financing. Strengthening the presence and effectiveness of lending institutions through targeted support and regulatory reforms is essential for fostering a conducive environment for SME growth and development. These findings underscore the importance of tailored policy interventions and institutional support in enhancing SME resilience and economic contributions in Nepal. Keywords: SMEs, credit accessibility, collateral security, lending institutions, interest rates, Nepalen-USCredit accessibilityInterest ratesThesis