Determinants of Informal Credit Use: A Cross Country Study

Yaldiz, Elmas; Altunbaş, Yener; Bazzana, Flavio

doi:10.2139/ssrn.1928812

Cited by 7 publications

(3 citation statements)

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“…In terms of owner characteristics, female-run firms are more likely to apply for loans (column [1]). Our findings are consistent with Yaldiz, Altunbas, and Bazzana (2011) who find that women entrepreneurs tend to have more demand and better access to formal credit because of their better education and business skills. In the same vein, Barslund and Tarp (2008) and Chaudhuri and Cherical (2011) emphasise a higher opportunity of women as compared to men in having access to credit.…”

Section: Firm's Credit Demandsupporting

confidence: 92%

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SME credit constraints in Asia’s rising economic star: fresh empirical evidence from Vietnam

Nguyen

Sharma

2019

Applied Economics

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This study provides a fresh look at the SME sector's economic backbone visà-vis credit constraint dichotomy in Vietnam-Asia's rising economic star. The study uses data from the Survey of Manufacturing SMEs in Vietnam from 2005 to 2013 and adopts a two-step Heckman modelling strategy to single out firms with formal financing needs that are credit constrained. Results show that several characteristics-including firm size, investment, financial assets, leverage, equity, registration, gender of owner, age, and education-significantly affect the likelihood of either credit constraints or demand. The main results do not change even when the issue of endogeneity is dealt with. Particularly, we provide evidence that unobserved factors that increase the probability of debt demand also increase the probability of being constrained. Policy implications are discussed.

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Section: Firm's Credit Demandsupporting

confidence: 92%

“…Doan, Gibson, and Holmes (2010) find that financial institutions prefer lending to firms with older owners, based on past positive repayment experience. Yaldiz, Altunbas, and Bazzana (2011) show that creditors prefer to lend to firms with older owners with better financial and managerial experience and skills.…”

Section: Firm's Credit Demandmentioning

confidence: 99%

SME credit constraints in Asia’s rising economic star: fresh empirical evidence from Vietnam

Nguyen

Sharma

2019

Applied Economics

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“…Nakano and Nguyen (2011) showed that the age of the firm's leader affected the finance access as older adults are higher risk-averse and less enthusiastic while working at work. However, this finding contradicted the finding of Yaldiz et al (2011) that suggested firm's financing obstacles are reduced with the owner's age and working experience.…”

Section: Discussioncontrasting

confidence: 78%

How Do Demand, Supply, and Institutional Factors Influence SME Financial Inclusion: A Developing Country Perspective

2023

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Greater access to finance by SMEs in developing countries is one of the most import powerful strategies to reduce poverty and unemployment issues and promote economic growth. The main objective of this study is to construct financial inclusion index for SMEs and identify the determinants of SMEs’ financial inclusion. The data are collected from the primary survey conducted in Sabaragamuwa province using the Stratified Random sampling method to achieve the abovementioned aims. A sample of 139 SMEs is used to analyze the data from a well-structured questionnaire. Principal Component Analysis (PCA) and Multiple Regression Analysis are applied to construct an index and identifying factors. The study’s findings reveal that the financial inclusion index for SMEs is weighted equally by access and quality of the financial services as the pillars. Further, the financial inclusion of SMEs is mainly determined by demand-side factors (ability to manage economic changes, proffer record keeping, and willingness to expand the business), supply-side factors (collateral requirements and application procedure), institutional factors (ownership type and sector of the firm), and some demographic characteristics of owner-manager of SMEs. The study recommends that the state bankers, commercial bankers, and policymakers should put in place policies that encourage financial service providers to set up their operations close and incorporate innovative approaches to ensure that they adopt technologies and financial services that are more accessible.

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