Financial Environment and Growth Potential of Small and Medium Enterprises in Bukidnon

This study investigates the relationship between the financial environment and the growth potential of small and medium enterprises (SMEs) in Malaybalay City and Valencia City, Bukidnon. Despite numerous national initiatives aimed at financial inclusion, SMEs in provincial settings continue to experience systemic challenges such as limited access to financing, high operational costs, poor financial literacy, and insufficient government support. The research employed a quantitative approach, utilizing structured questionnaires distributed to 377 SME owners and managers across various sectors including agriculture, services, and retail. The study measured four components of the financial environment—access to financing, financial management practices, operational costs, and access to government support programs—and their influence on key growth indicators: revenue growth, market expansion, sustainability, and innovation capacity. Descriptive statistics, correlation analysis, and regression techniques were used to analyze the data. Results showed that the overall financial environment was perceived as minimally challenging, with relatively favorable access to financing but ongoing barriers in cost control and strategic planning. A statistically significant relationship was found between the financial environment and SME growth potential, with financial management and government support emerging as strong predictors. The findings underscore the need for more localized, accessible, and responsive financial policies tailored to the unique needs of rural enterprises. This study contributes empirical evidence that can guide policymakers, business development agencies, and financial institutions in creating sustainable growth strategies for SMEs operating in non-metropolitan regions.