What Have We Learned from the Enterprise Surveys Regarding Access to Credit by SMEs?
Using a unique firm level data set --
the Enterprise Surveys -- this paper develops a new measure
of credit-constrained status for firms using hard data
instead of perceptions data. The paper classifies firms into
four ordinal categories: Not Credit Constrained, Maybe
Credit Constrained, Partially Credit Constrained, and Fully
Credit Constrained to understand the characteristics of the
firms that fall into each group. Comparable data from the
Enterprise Surveys for 116 countries are used to look at the
relationship between firm size and credit-constrained
status. First, the analysis finds that small and medium
enterprises are more likely to be credit constrained (either
partially or fully) than large firms. Furthermore, small and
medium enterprises finance their working capital and
investments mainly through trade credit and informal sources
of finance. These two results hold to a large extent in all
the regions of the developing world. Second, although size
is a significant predictor of the probability of being
credit constrained, firm age is not. Third, high-performing
firms, as measured by labor productivity, are less likely to
be credit constrained. This result applies to all firms but
is not as strong for small firms as it is for large and
medium firms. Finally, in countries with high private
credit-to-gross domestic product ratios, firms are less
likely to be credit constrained. Given the importance of
access to credit for firm growth and efficiency, this paper
confirms that throughout the developing world access to
credit is inversely related to firm size but positively
related to productivity and financial deepening in the country.
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Bibliographic Details
| Main Authors: |
Kuntchev, Veselin,
Ramalho, Rita,
Rodriguez-Meza, Jorge,
Yang, Judy S. |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2013-10
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| Subjects: | ACCESS TO CREDIT,
ACCESS TO EXTERNAL FINANCE,
ACCESS TO FINANCE,
ACCOUNTING,
AFFILIATED ORGANIZATIONS,
ANNUAL SALES,
BANK FINANCING,
BANK LOAN,
BANK LOANS,
BUSINESS ENVIRONMENT,
BUSINESS ENVIRONMENTS,
CAPACITY UTILIZATION,
CAPITAL FINANCE,
COLLATERAL,
COMPETITORS,
CORPORATE FINANCE,
CORRUPTION,
CREDIT CONSTRAINED FIRMS,
CREDIT CONSTRAINT,
CREDIT MARKET,
DEBT,
DEBT FINANCE,
DEPENDENT,
DEPOSIT,
DEPOSIT ACCOUNTS,
ECONOMIC ACTIVITY,
EDUCATION LEVEL,
EMPLOYERS,
EMPLOYMENT,
EQUITY FINANCE,
EUROPEAN CENTRAL BANK,
EXTERNAL CREDIT,
EXTERNAL DEBT,
EXTERNAL FINANCE,
EXTERNAL FINANCING,
FINANCIAL ACCESS,
FINANCIAL CONSTRAINTS,
FINANCIAL DEEPENING,
FINANCIAL INSTITUTIONS,
FINANCIAL INSTRUMENT,
FINANCIAL INSTRUMENTS,
FINANCIAL MARKETS,
FINANCIAL SERVICES,
FINANCING CONSTRAINTS,
FINANCING OBSTACLES,
FIRM PERFORMANCE,
FIRM SIZE,
FIRM SIZES,
FIXED ASSETS,
FOREIGN OWNERSHIP,
FORMAL DEBT FINANCE,
FORMAL WORKFORCE,
GENDER,
INFORMAL CREDIT,
INFORMAL FINANCING,
INTERNATIONAL BANK,
JOB CREATION,
LARGE FIRMS,
LEVEL OF CREDIT,
LEVELS OF CREDIT,
LINE OF CREDIT,
LIQUID ASSETS,
LOAN APPLICATION,
LOAN APPLICATIONS,
MANDATE,
MEDIUM ENTERPRISES,
MEDIUM SIZE ENTERPRISES,
MONEYLENDERS,
MULTINATIONAL,
NEW CREDIT,
OUTSTANDING LOAN,
PRIVATE CREDIT,
PRODUCTIVITY,
SAVINGS,
SAVINGS ACCOUNT,
SHAREHOLDING,
SMALL BUSINESS,
SMALL FIRM,
SMALL FIRMS,
SME,
SOURCES OF CREDIT,
SOURCES OF FINANCE,
SUPPLIERS,
TRADE CREDIT,
TRANSPORT,
WORKING CAPITAL,
Microdata Set, |
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| Online Access: | http://documents.worldbank.org/curated/en/2013/10/18425135/learned-enterprise-surveys-regarding-access-credit-smes
https://hdl.handle.net/10986/16885
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