Start‐Up Informal Finance and Formal Microfinance: The Role of Human Capital

Koubâa, Hédia Fourati

doi:10.1002/jsc.1986

Cited by 8 publications

(5 citation statements)

References 36 publications

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“…In Mali, evidence shows that using microfinance for agricultural loans when compared to cash grants increased purchasing of agricultural products, showing a higher return to capital (Beaman et al, 2014). Although positive effects and an increase in microfinancing has been seen in the past 40 years (Koubâa, 2014), micro-financing institutions still have many limitations.…”

Section: Background Financial Resourcesmentioning

confidence: 99%

Smallholder Farmers Spend Credit Primarily on Food: Gender Differences and Food Security Implications in a Changing Climate

Carranza

Niles

2019

Front. Sustain. Food Syst.

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In many low-income nations agriculture is used as the primary source of income, which in the face of a changing climate, is known to be at considerable risk for the smallholder farmers that rely on it. Financial resources may enable smallholder farmers to implement adaptation practices and diversify income and investments, which has the potential to affect household income and food security. Here we explore relationships between access to different types of financial resources among male and female-headed households and women vs. men, use of financial resources, and its relationship to food security. We use data from the CGIAR Climate Change, Agriculture, and Food Security (CCAFS) program from four sites including Nyando (Western Kenya) and Wote (Eastern Kenya), Rakai (Uganda) and Kaffrine (Senegal), to represent major farming systems and agro-ecological zones across Africa. We find that male and female-headed households do not attempt to borrow financial resources in significantly different quantities; however, female-headed households are less likely to have access to financial resources if they wanted them. We find that men and male-headed households are more likely to access formal loans. As well, we find that male and female-headed households spend their financial resources differently with female-headed households most likely to use their credit for food, medical expenses and education and male-headed households most likely to use it on food, agriculture/ livestock inputs and education. Formals loans were more frequently associated with credit spent on agriculture/livestock inputs while informal loans were more likely to be utilized for buying food and medical care. In the context of food security we find that all households and sexes that attempted to borrow money in the past 12 months were less likely to borrow food or other goods, but that female-headed households were more than twice as likely to borrow food or other goods overall. These results add nuance to the relationship of financial resources to food security, suggesting that for many smallholders, especially women, credit is often used to obtain food and other health outcomes as compared to on-farm investment. The use of financial resources for these varying purposes likely has different short-term vs. long-term returns and tradeoffs, which could influence smallholder farmer capacity for climate change adaptation.

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Section: Background Financial Resourcesmentioning

confidence: 99%

Smallholder Farmers Spend Credit Primarily on Food: Gender Differences and Food Security Implications in a Changing Climate

Carranza

Niles

2019

Front. Sustain. Food Syst.

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“…Access to traditional forms of financing may be hindered by attitudes and perceptions other than the business itself. Koubâa (2014) examined the role of microfinance in the success of entrepreneurs. Koubâa concentrated on informal financing (i.e., friends and family) and on microfinance financing for start-ups to see how human capital establishes access to financing for entrepreneurs with restricted access to other types of investment.…”

Section: Discussionmentioning

confidence: 99%

Entrepreneurial Financing Based on (Dis)ability

Howard¹,

Ulferts²

2020

OJBM

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The purpose of this research was to add to a qualitative study by conducting a survey of entrepreneurs to gain an understanding of the financing options used by small businesses. The results of an initial qualitative case study of three entrepreneurs suggested that financing issues were of concern to entrepreneurs with disabilities (EWDs). The quantitative analysis determined whether differences existed in the use of funding between EWDs and entrepreneurs without disabilities (EWODs). Overall, the sample size of 251 allowed the researcher to determine normal distribution and that the results were reliable. The independent sample t-tests resulted in the rejection of both null hypotheses, indicating that significant differences existed in the use of the studied financing options. There is a statistical difference between EWDs and EWODs relative to the receipt of financing (traditional and alternative).

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“…Although recent scholarly research (e.g. Naegels et al, 2018;Simba & Nziku, 2022) has called for gender equality in terms of access to resources, the ability of women to secure financial resources for their firms through regulated money lenders remains limited because of social biases surrounding gender (Koubâa, 2014). Even with the constant attention on gender issues (Dabić et al, 2022), women entrepreneurs still face business investment challenges (Leitch et al, 2018).…”

Section: Credit Access and The Stakeholder-agency Relationshipmentioning

confidence: 99%

Deconstructing involuntary financial exclusion: a focus on African SMEs

et al. 2023

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Small and medium-sized enterprises (SMEs) struggle to obtain credit when credit ratings and collateral are used as criteria to assess their credit applications. In the context of Africa, the financial markets have gaping institutional voids, and contextual insights into SMEs’ experiences remain underdeveloped. Drawing on the stakeholder-agency theory of debt financing, this paper advances the scholarly conversation by theorising about how collateral security, collateral security value and the gender of SME owners lead to the involuntary financial exclusion of many manufacturing businesses in Africa. Analysis of the World Bank Enterprise Survey (WBES) dataset reveals that collateral security and collateral security value, together with gender biases in Africa’s financial markets, reduce credit access potential. Consequently, SMEs’ perceptions of the likelihood of obtaining credit for business purposes are reduced. Empirical results for 13,783 SMEs across 41 African countries indicate that the motivations to apply for credit also diminish. These observations contribute to entrepreneurial financing and SME research.

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Start‐Up Informal Finance and Formal Microfinance: The Role of Human Capital

Abstract: Microfinancial institutions afford funding to the financially constrained and to the serious entrepreneur (of age and highly educated).

Cited by 8 publications

References 36 publications

Smallholder Farmers Spend Credit Primarily on Food: Gender Differences and Food Security Implications in a Changing Climate

Smallholder Farmers Spend Credit Primarily on Food: Gender Differences and Food Security Implications in a Changing Climate

Entrepreneurial Financing Based on (Dis)ability

Deconstructing involuntary financial exclusion: a focus on African SMEs

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