Knowing how SMEs are financed is a vital issue in the study area of SMEs financing. A huge body of literature has investigated the structure of financing SMEs from the perspective of both developed and developing countries, though the evidence is scarce in relation to developing countries. Though only in recent years, there has been a rising body of literature in relation to structure of financing SMEs in developing country perspective. From the evidences of SMEs financing in both developed and developing countries , it is found that the intensity of growth of a country’s legal and financial systems to a great deal control the financing structure of SMEs (Gregory, Rutherford, Oswald and Gardiner ,2005). There are a range of diverse sources of finance for SMEs, where a difference may well be made amid ‘internal’ and ‘external’ financing sources. Internal financing is the most general source of SMEs financing and comprises owner investment, with that of funding in the course of retained profits, and the sailing of assets. Several SMEs, particularly fast-growth firms as well necessitate ‘external’ sources of finance. The internal sources of financing are informal, whereas the external sources of financing are formal. Furthermore, a differentiation may well be created amid ‘informal’ financing sources, for instance wealth can be raised externally all the way through friends, families and a few conformist sources of external or formal financing. External or formal sources of finance include long-established debt finance in the variety of loans from bank and new financial institutions, micro credits and leasing and hire purchase. Supplementary external financing sources consist of risk capital in the forms of venture capital, equity financing and mezzanine instruments (Beck, Demirgüç-Kunt and Peria(2008). Taking account of various informal and formal sources of finance it may well be supposed that generally SMEs have option to make use of a grouping of financing sources considering their phase of growth and expansion. However, a foremost concern for SMEs in selecting the source of finance will be to hit a balance amid equity and debt to guarantee the funding structure outfits the businesses requirements.