A New Regime of SME Finance in Emerging Asia: Enhancing Access to Growth Capital and Policy Implications

Shinozaki, Shigehiro

doi:10.1142/9789814678810_0005

Cited by 10 publications

(10 citation statements)

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“…According to OECD/ERIA (2018), nancial constraints are more signi cant for SMEs and hinder rms' innovation and growth opportunities. Previous studies (Kyophilavong 2011;Shinozaki 2012; CSO (Myanmar) and UNU Wider 2018; Myint 2020) show the adverse impact of nancial constraints on SMEs' survival and growth. Thus, nancial constraints can have a signi cant impact on a country's industrialization and socioeconomic development.…”

Section: Introductionmentioning

confidence: 93%

Information transparency, collateral problem and bank credit accessibility of small and medium enterprises in ASEAN countries

THEIN,

Niigata,

Inaba

2023

Preprint

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Financial constraints can harm the growth of small and medium enterprises (SMEs), ultimately impacting a country’s economy and industrialization. Information asymmetry leads banks to rely on collateralized lending which hinders SMEs from accessing bank loans. However, information and communication technology (ICT) and audited financial statements (FSs) can enhance SMEs’ information provision for banks. Despite this, previous studies have paid little attention to the relationship between ICT, FSs and SME financing. This study investigates the impact of FSs and ICT on SME financing, as well as their influence on SMEs’ collateral payments in accessing bank loans in eight ASEAN countries. We use the Business Environment and Enterprise Performance Surveys (BEEPS) provided by the World Bank to analyze the data. The results reveal that FSs and ICT can promote SMEs’ bank credit accessibility and reduce collateral issues in accessing bank loans by making SMEs’ information more transparent. SMEs in countries with more developed financial infrastructure can benefit more from FSs and ICT. Furthermore, larger economies enable SMEs to access cheaper finance and mitigate collateral problems. Information transparency is crucial for banks in easing bad debt issues. Therefore, encouraging and supporting SMEs to adopt FSs and ICT can benefit both SMEs and banks.

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Section: Introductionmentioning

confidence: 93%

Information transparency, collateral problem and bank credit accessibility of small and medium enterprises in ASEAN countries

THEIN,

Niigata,

Inaba

2023

Preprint

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“…With regards to the underserved sector wherein existing SME borrowers have been facing access constraints to formal finance, clearly the quantum of the problem is larger in India. Perhaps, the policy push through innovative reforms and institutional configurations such as the Small Industries Development Bank of India (SIDBI) or the variety of policy 15 There is some evidence that the quantum of credit consumption and the growth of the SME firms are interlinked (Shinozaki, 2012;CDC Group, 2017). In particular, there seems to be a threshold beyond which credit access leads to retardation of growth for these firms.…”

Section: Contrasting Financial Inclusion Constraints For the Sme Sect...mentioning

confidence: 99%

SME Financial Inclusion in India and Indonesia: Financing Gap, Extent and Constraints

Baria,

Mehta

2024

Preprint

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This paper examines three issues on the financial inclusion of SME firms in India and Indonesia while drawing meaningful comparatives. The first issue addressed in this paper is the extent of the SME financing gap wherein appropriate econometric exercises are conducted to model the potential demand for formal credit by the SME sector at the aggregate level. Thereafter, the wedge between the potential demand for credit and the actual consumption of credit is worked to arrive at alternative measures of the SME financing gap. The second issue is the assessment of how far the SME firms have been experiencing access to formal credit markets in India and Indonesia while digging into the comparative performance of both economies on this dimension. The third matter examined in this study pertains to the financial access constraint faced by SME firms both in terms of the unserved and underserved sectors. The Financial Access Survey of the International Monetary Fund, Global Enterprise Surveys for formal SMEs by the World Bank, and data from official agencies of India and Indonesia are taken into consideration. Both economies have displayed quite different dynamics in terms of the time path of the SME financing gap. With regards to the extent and constraint dimensions, there is a large scope to reach not only the unbanked SME firms but also those that are currently consuming sub-optimal quantum of credit.

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“…Specifically, the emotional bias, including planning fallacy, optimism, and overconfidence, likely explains the emotional aspects in financing decisions. MSMEs in several Asian countries face obstacles in accessing external financing that inhibit their growth (Shinozaki, 2014;Urim & Imhonopi, 2015;Wang, 2014). Hence, this study also examines the effect of financing decisions on MSME performance in Salatiga City.…”

Section: Introductionmentioning

confidence: 99%

Entrepreneurial orientation and emotional bias in MSMEs’ financing and performance

Rita

Kristanto

Nugrahanti

et al. 2021

jeb

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There have been numerous studies investigating the dynamics of micro, small and medium enterprises (MSME) development. However, this research topic still offers several interesting research gaps to be explored. Accordingly, the purpose of this research is to test the effects of entrepreneurial orientation and asymmetric information that affect MSME entrepreneurs’ emotional biases, as well as the relationships between these variables and MSME’s financing and performance. Our research objects are MSMEs located in four urban villages in Salatiga City, Central Java that engage in various business sectors, such as the food and beverage, the service industry, the groceryw, and the horticulture sector. We analyze the research data with the Partial Least Square (PLS) software. The research results reveal that entrepreneurial orientation and asymmetric information positively influence MSME entrepreneurs’ emotional bias. Meanwhile, emotional bias has a significantly positive influence on financing. Finally, we also find that financing positively affects MSMEs’ performance. In sum, our study demonstrates the importance of the behavioral aspect (emotional bias) in explaining MSMEs’ performance through its indirect impact through financing.

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A New Regime of SME Finance in Emerging Asia: Enhancing Access to Growth Capital and Policy Implications

Cited by 10 publications

References 0 publications

Information transparency, collateral problem and bank credit accessibility of small and medium enterprises in ASEAN countries

Information transparency, collateral problem and bank credit accessibility of small and medium enterprises in ASEAN countries

SME Financial Inclusion in India and Indonesia: Financing Gap, Extent and Constraints

Entrepreneurial orientation and emotional bias in MSMEs’ financing and performance

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