Credit Rationing in Small and Micro Enterprises: A Theoretical Analysis

Jin, Yuhuan; Zhang, Sheng

doi:10.3390/su11051330

Cited by 16 publications

(14 citation statements)

References 32 publications

(30 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This is confirmed by the "Better" and "Worse" coefficients, which show that their presence increases customer satisfaction at most 15% while their absence can generate until 82% of customer dissatisfaction. The results are in line with the prevailing literature which recognises financial, credit and payment services as essential for international businesses (De Maeseneire and Clays, 2012;Eriksson et al, 2017;Jin and Zhang, 2019;Ghulam, 2019).…”

Section: Discussionsupporting

confidence: 90%

“…Penetrating foreign markets involves a significant effort and high costs for companies that must collect a lot of information, design products that adapt to foreign preferences, create distribution networks and invest in advertising (Jin and Zhang, 2019). For all these activities, SMEs need the support of banks (Godke Veiga and McCahery, 2019) not only to access financial resources but also to facilitate buyer-seller transactions (Durkin et al, 2013), share knowledge and receive business-consulting services (Binks et al, 2006).…”

Section: Banking Services For Smesmentioning

confidence: 99%

See 1 more Smart Citation

Banking services for SMEs' internationalization: evaluating customer satisfaction

Formisano

Tartaglione

Fedele

et al. 2020

TQM

View full text Add to dashboard Cite

PurposeThe purpose of this paper is to analyse the quality of banking services provided in support of small- and medium-sized enterprises' (SMEs) internationalization from the customers' perspective.Design/methodology/approachCustomer satisfaction of 50 Italian SMEs with the banking services provided for international activities has been evaluated by adopting the Kano model's continuous and discrete analyses.FindingsResults show which banking services provided for business internationalization are necessary to satisfy customers' expectations, which services customers like having and dislike not having and which services are unexpected by customers creating a high increase in satisfaction when provided.Research limitations/implicationsThis work shows the value of the Kano model in evaluating the non-linear relationship between customer satisfaction and quality of banking services for the international activities of companies. The main limitation of this work is the limited geographical context of the investigation.Practical implicationsThis research suggests banks to transform their role in the relationship with SMEs from mere financiers to active partners committed to their growth abroad by offering a wide range of services not just financial, but also counselling and care professional, thus achieving mutual benefits.Originality/valuePrevious works on banking services and business internationalization are focussed on the transaction costs, information asymmetries and the impact of online banking. This work advances available knowledge by analysing the customer's point of view, evaluating the satisfaction of SMEs which, although more dependent on banks for their expansion abroad than large listed companies, are mostly ignored by literature.

show abstract

Section: Discussionsupporting

confidence: 90%

Section: Banking Services For Smesmentioning

confidence: 99%

Banking services for SMEs' internationalization: evaluating customer satisfaction

Formisano

Tartaglione

Fedele

et al. 2020

TQM

View full text Add to dashboard Cite

show abstract

“…Jaffee and Modigliani's (1969) argued that the lender can act as the discriminating factor by charging the same interest rate for different demand curves of credit. The credit rationing in the financial markets adversely affects micro and small enterprises which are the most likely to be eliminated than the large enterprises (Jin & Zhang, 2019). Asymmetry of information, transaction costs, agency problems, undocumented credit history, poor records or financial statements and tendency of being undercapitalized limit access to credit by small businesses and start-ups (OECD, 2013).…”

Section: Credit Rationing Theorymentioning

confidence: 99%

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Alumasa¹,

Muathe²

2021

Journal of Applied Finance &Amp; Banking

View full text Add to dashboard Cite

Micro and small enterprises sector is considered as very important in growing the economies of many countries, especially the developing nations. In Kenya, the Micro and small enterprises sector is an important contributor to the growth of the economy through facilitation of trade and creation of employment. While various interventions have been made to grow this sector, the enterprises have continued to perform poorly, struggle to survive and a large number die off. This study sought to investigate the effect of mobile credit on performance of micro and small enterprises. The study was to determine the effect of accessibility, the effect of the cost, the effect of mobile credit loan amount and the effect of regulation on performance of micro and small enterprises. The study was anchored on various theories of Resource based view, Dynamic capabilities, Diffusion of technology, Credit rationing, and the asymmetry of information. The study found out that the accessibility of mobile credit, the Loan amount and the regulation have significant positive effect on performance, while the cost of mobile credit has a significate negative effect on the performance of micro and small enterprises. The study concluded that mobile credit is an essential source of credit to micro and small enterprises. Keywords: Mobile credit, Micro and small enterprises, Performance, Resource based view, Dynamic capabilities theory.

show abstract

“…Inability to access credit as an obstacle experienced by SMEs is documented by various researchers including Kaberia & Muathe (2021); Jin and Zhang (2019); OECD (2018); Chowdhury and Alam (2017); World Bank (2017); Hoque, Sultana, & Thalil (2016) as well as Kiplimo, Ngenoh and Bett (2015). The previous studies conducted provided mixed conclusions on direct relationship between financial statements lending on access to financial services.…”

Section: Introductionmentioning

confidence: 99%

Financial Statement Lending, Credit Information Sharing and Access to Financial Services by Small and Medium Enterprises in Kenya

Kiring’a¹,

Ndede²,

Wekesa³

2021

RJFA

View full text Add to dashboard Cite

Policy makers and scholars acknowledge the significance of small and medium enterprises in stirring the economic growth and development in developing and developed economies. In spite of the generally fast pace by which access to financial services for small and medium enterprises is being established, significant segments of the small and medium enterprises sector do not yet benefit from the expansion. This study therefore investigated the effect of financial statement lending on access to financial services by small and medium enterprises in Kenya. The study further sought to establish the moderating effect of the credit information sharing on the relationship between financial statement lending and access to financial services by small and medium enterprises in Kenya. The study was based on Financial Intermediation Theory and information asymmetry theory. The target population comprised 4,253 small and medium enterprises in Kenya. A sample size of 366 SMEs was target by the study. The study adopted multistage sampling technique to obtain the SMEs respondents. Primary data was utilized and was acquired through semi-structured questionnaires. Data was analysed using descriptive and inferential statistics. Heckman two step selection model was applied in regression analysis. The findings of regression analysis show that financial statement lending had a positive and significant effect on access to financial services among SMEs in Kenya. The results established that credit information sharing had insignificant moderating effect on the relationship between financial statement lending and access to financial services among the SMEs in Kenya. The study concluded that financial statements play a critical role in ensuring small and medium enterprises access financial services. Lenders can determine the financial position of the business by analysing their cashflow in order to be able to advance the credit that the business is able to pay based on their financial statement.

show abstract

Credit Rationing in Small and Micro Enterprises: A Theoretical Analysis

Cited by 16 publications

References 32 publications

Banking services for SMEs' internationalization: evaluating customer satisfaction

Banking services for SMEs' internationalization: evaluating customer satisfaction

Mobile Credit and Performance: Experience and Lessons from Micro and Small Enterprises in Kenya

Financial Statement Lending, Credit Information Sharing and Access to Financial Services by Small and Medium Enterprises in Kenya

Contact Info

Product

Resources

About