Is there a debt finance gap relating to Scottish SMEs? A demand-side perspective

North, David; Baldock, Robert; Ekanem, Ignatius U.

doi:10.1080/13691061003658670

Cited by 53 publications

(47 citation statements)

References 5 publications

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“…On the other hand, for example, Islam et al, (2011) state that older fi rms are more successful in their performance than the younger ones. In this context North, Baldock, and Ekanem (2010), Deakins, Whittam, and Wyper (2010), Deakins et al, (2008) state that new and early staged SMEs are facing more fi nancing problems from the banks than their more established counterparts. Such factors as better accounting information, fi rm size and fi rm age were found to have a positive relationship to the probability of getting a bank loan.…”

Section: Theoretical Partmentioning

confidence: 99%

Significant determinants of the competitive environment for SMEs in the context of the financial and credit risks

Belás¹,

Sopková²

2016

Journal of International Studies

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Abstract. Th e aim of the article is to compare signifi cant determinants of the competitive environment for small and medium-sized enterprises in the context of fi nancial and credit risk in Czech Republic and Slovakia. Th e survey on the quality of business environment was carried out in 2015 through a questionnaire on the sample of 1,141 respondents in Czech Republic. Th e total number of 438 questionnaires was collected during the research in Slovakia. Based on our own model, we quantifi ed the index of perception of fi nancial and credit risk (IFCR) for Czech Republic and for Slovakia. We compared the approach to risk by gender and education of the businessmen and company's age through Pearson statistics at the signifi cance level of 5%. Our research has shown that business environment in both countries is characterized by relatively low level of competitiveness in the researched area. Th e value of the resulted index in Czech and Slovak business environments is less than the median interval value. We also determined that the value of IFCR is signifi cantly higher in Slovakia. Our research indicates there are signifi cant diff erences in the assessment of business environment quality through IFCR in both countries, depending on gender and education of entrepreneurs and depending on company's age. Th at index in Czech Republic is signifi cantly higher in case of women as compared to men and in Slovakia it is the opposite. We have also found that businessmen with lower level of education have higher IFCR in both countries. Older fi rms showed better conditions for doing business in both countries because of their higher value of IFCR in both Czech Republic and Slovakia.

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Section: Theoretical Partmentioning

confidence: 99%

Significant determinants of the competitive environment for SMEs in the context of the financial and credit risks

Belás¹,

Sopková²

2016

Journal of International Studies

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“…In addition, the informal finance sector consists of informal finance such as micro finance and credit and saving organisations (Gbandi and Amissah, 2014). North et al (2010) point out that despite the existence of many sources of debt, access to debt finance is limited for SMEs especially new ones in South Africa. This is termed the debt gap.…”

Section: Debtmentioning

confidence: 99%

The Financing Options for New Small and Medium Enterprises in South Africa

Fatoki¹

2014

MJSS

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“…The most important source of external finance for small firms is bank debt (Beck, Demirguc-Kunt, Maksimovic, 2008), although small firms are frequently constrained in their access to adequate debt to resource their ventures (North, Baldock, and Ekanem 2010). This has significant adverse consequences, both for individual firms and the macroeconomy, and particularly for new firms seeking to grow (Beck and DemirgucKunt 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

Can Credit Unions Bridge the Gap in Lending to SMEs?

2015

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.Small firms continue to experience difficulty accessing adequate finance from formal external sources, notwithstanding many and varied institutional and policy initiatives introduced to address this seemingly perennial problem. Underpinning research indicates that information asymmetry is the principal reason for the finance gap, particularly for young firms. The aim of legislation introduced in the UK in 2012 is to utilise the credit union sector to increase the amount of new lending to SMEs. The rationale for this legislative change arises because credit unions typically operate within a defined geographic region, they can compile detailed local knowledge of small businesses and are therefore uniquely placed to minimise information asymmetries thereby reducing the funding gap for small firms. Despite this perceived advantage, credit unions have been reluctant to take advantage of this legislative and lending by credit unions to SMEs has been negligent to date. We investigate the reasons for this lack of engagement in SME lending by interviewing the chief executives of five credit unions in Scotland.Our findings reveal that the CEOs of the credit unions are reluctant to lend to SMEs at present, as they are uncomfortable with the level of risk associated with lending to a sector of which they have little experience or expertise. Furthermore, credit unions will need to offer attractive interest rates to compete with high street banks and an increasing number of microcredit providers. Policy makers need to better understand the structure and function of credit unions before assigning a greater role in SME lending. It is too early to say whether credit unions can play a significant role in SME lending, and our evidence suggests that structural issues must first be resolved before they become an established presence in the SME lending ecosystem.

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Is there a debt finance gap relating to Scottish SMEs? A demand-side perspective

Cited by 53 publications

References 5 publications

Significant determinants of the competitive environment for SMEs in the context of the financial and credit risks

Significant determinants of the competitive environment for SMEs in the context of the financial and credit risks

The Financing Options for New Small and Medium Enterprises in South Africa

Can Credit Unions Bridge the Gap in Lending to SMEs?

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