Finance Constraints and Firm Transition in the Informal Sector: Evidence from Indian Manufacturing

Mobile Loans as Financing Options in Kenya and the Financial Performance of SMEs in Low Income Areas in Nairobi County

“…In this regard, the respondents agreed that ease in obtaining mobile loans contributes to the financial performance of their business and that the inability to access financing affected the growth of small firms in the area. These findings corroborate those of Raj and Sen (2015) who posit that access financing had significant relationships with the growth of small firms in the informal sector.…”

“…Lack of requirements for paperwork and securities also made it easy to access financing. Accessibility also boosted their businesses and led to expansion which agrees with Raj and Sen (2015). In some instances though, ease of loan access meant that most businesses ended up having unnecessary liabilities.…”

Transitions between informal and formal jobs in India: Patterns, correlates, and consequences

“…For the larger of the unregistered non-household enterprises, the decision not to formalize may be because these enterprises choose to avoid the occupational and health regulations that every formal firm needs to follow under the Indian Factories Act of 1948 (Kanbur 2017). For the smaller of the unregistered non-household enterprises, constraints to growth may be due to lack of availability of credit and skilled labour (Raj and Sen 2015). Unregistered non-household enterprises are significantly more productive than household enterprises in India and can be classified as upper-tier informal self-employed, while household enterprises can be classified as lower-tier informal self-employed (Raj and Sen 2016).…”

Monitoring Costs, Credit Constraints and Entrepreneurship

“…Instead, we use the maintenance of accounts by the entrepreneur (ACMAINT) as a proxy for ability. As Raj and Sen (2015) show, entrepreneurs that maintain accounts tend to see their firms grow in size. The variable ACMAINT takes the value of 1 if the entrepreneur maintains an account, 0 if not.…”