Ethnic networks and access to credit: evidence from the manufacturing sector in Kenya

Biggs, Tyler; Raturi, Mayank; Srivastava, Pradeep

doi:10.1016/s0167-2681(02)00030-6

Cited by 88 publications

(66 citation statements)

References 5 publications

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“…28 Biggs, Raturi and Srivastava (2002) illustrate the occurrence of such anity in informal nance in Kenya. 29 Pearson χ 2 (1) = 33.6798 and P-value = 0.000. This eect is surprising given that, in Vivacred, each credit ocer has a specic geographic area to serve.…”

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confidence: 97%

Microfinance and Gender: Is There a Glass Ceiling in Loan Size?

Agier

Szafarz

2010

SSRN Journal

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Microfinance institutions serve a majority of female borrowers. But do men and women benefit from same credit conditions? This paper investigates this issue by presenting an original model and testing its predictions on an exceptional database including 34,000 loan applications from a Brazilian microfinance institution over an eleven-year period. The model considers a lender that offers standardized loan contracts with a fixed interest rate, which is common practice in microfinance. It demonstrates that biased loan attribution may lead to three different outcomes, depending on the bias intensity: 1) denial of all applications from a given group, 2) a "glass ceiling" effect, namely loan downsizing of the largest projects from a given group, or 3) no impact. The empirical analysis detects no gender bias in approval rate, but uncovers a glass ceiling effect hurting female applicants. Moreover, this effect is insensitive to the credit officer's gender. In conclusion, the good news is that the microfinance practice does ensure a fair access to credit. The bad news is the presence of a glass ceiling faced by female entrepreneurs with larger projects. AbstractMicronance institutions serve a majority of female borrowers. But do men and women benet from same credit conditions ? This paper investigates this issue by presenting an original model and testing its predictions on an exceptional database including 34,000 loan applications from a Brazilian micronance institution over an eleven-year period. The model considers a lender that oers standardized loan contracts with a xed interest rate, which is common practice in micronance. It demonstrates that biased loan attribution may lead to three dierent outcomes, depending on the bias intensity: 1) denial of all applications from a given group, 2) a glass ceiling eect, namely loan downsizing of the largest projects from a given group, or 3) no impact. The empirical analysis detects no gender bias in approval rate, but uncovers a glass ceiling eect hurting female applicants. Moreover, this eect is insensitive to the credit ocer's gender. In conclusion, the good news is that the micronance practice does ensure a fair access to credit. The bad news is the presence of a glass ceiling faced by female entrepreneurs with larger projects.

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confidence: 97%

Microfinance and Gender: Is There a Glass Ceiling in Loan Size?

Agier

Szafarz

2010

SSRN Journal

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“…Comme l'illustrent divers travaux théoriques et empiriques, les réseaux facilitent la circulation de l'information, procurent aux banquiers des garanties personnelles plus solides, exercent des mécanismes internes de contrôle et de sanction aux membres, etc. (Kim, Surroca et Tribó, 2008 ;Biggs et Shah, 2006 ;Tyler, Mayank et Pradeep, 2002 ;Biggs, Raturi et Srivastava, 2002 ;Uzzi, 1999 ;Fafchamps, 1999 ;Fukuyama, 1995 ;etc.). Tous ces avantages sont susceptibles de faciliter l'accès au crédit bancaire ;…”

Section: Définition Des Variables Et Source Des Donnéesunclassified

Le rôle du capital social en matière d’octroi de crédits bancaires aux PME

Wamba

Sebigunda

2014

ipme

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Perçu comme une des contraintes majeures au développement et à la croissance, l’accès au crédit bancaire demeure une question d’actualité dans la formulation des politiques de promotion et d’encadrement de la PME. En effet, non seulement la PME est souvent caractérisée par une certaine nébulosité dans sa gestion, mais elle est aussi parfois incapable de présenter des éléments de garantie exigés par les banques. Le capital social est de plus en plus évoqué comme un instrument à même de réduire les coûts de transaction des banques dans la surveillance de leurs clients et, par conséquent, devrait amoindrir les désavantages de l’asymétrie d’information. Ainsi, en se situant dans un environnement caractérisé par de fortes asymétries d’information à l’instar de l’Afrique, cette étude examine l’aptitude du capital social à faciliter l’accès au crédit bancaire de la PME camerounaise. Les tests empiriques effectués à partir du modèle Logit multinomial sur la base d’un échantillon de 413 PME, font ressortir un effet positif et significatif de l’indice du capital social sur l’octroi du crédit bancaire, quel que soit le terme. Globalement, l’aptitude du capital social à faciliter l’accès au crédit bancaire passe par la réduction du degré d’opacité de la PME aux yeux du banquier.

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“…Related to managerial practices, there are several ways in which ethnicity can influence the allocation of credit, either through the propensity for discrimination (Akerlof, 1985), prejudice (Yinger, 1998), difficulties of communication across cultural barriers (Cornell and Welch, 1996;Loury, 1998), statistical discrimination (Coate and Loury, 1993), the effects of network (Saloner, 1985;Montgomery, 1991). In addition, several empirical studies have considered ethnicity as a variable likely to influence corporate behavior in the matter of trade credit (Biggs et al, 1996;Fafchamps, 1996aFafchamps, , 1997Fafchamps, , 2000Biggs et al, 2002;Isaksson, 2002;Fisman and Raturi, 2004;Aaronson et al, 2004;Coleman, 2005).…”

Section: Sociocultural Contingency Variablesmentioning

confidence: 99%

The Determinants of Trade Credit Demand: An Empirical Study from Cameroonian Firms

Guy¹,

Mazra²

2012

IJBM

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Research on trade credit has been growing in recent years, contributing to our understanding of the phenomenon. However, the main problem is probably the impact of the contingent nature of the payment practices used by companies. The purpose of this paper is to address the determinants of trade credit in the Cameroonian context. Based on a sample of 65 Cameroonian companies observed in 2006, the econometric investigations highlight a genuine financial intermediation business close to productive activity. We used a general model incorporating both financial variables, transactional and sociocultural in order to estimate the joint effect of all explanatory variables on the trade credit which is a kind of investment in business relationship. Logistic regression results confirmed the positive and significant correlation between rationing and trade credit. There is also apparent influence of contingency factors on sociocultural commercial time through social capital and ethnicity of trade and investment partners. Moreover the manager share of capital positively influences the duration of the trade credit where as the financial motive is one that mostly influences to the companies' behavior.

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Ethnic networks and access to credit: evidence from the manufacturing sector in Kenya

Cited by 88 publications

References 5 publications

Microfinance and Gender: Is There a Glass Ceiling in Loan Size?

Microfinance and Gender: Is There a Glass Ceiling in Loan Size?

Le rôle du capital social en matière d’octroi de crédits bancaires aux PME

The Determinants of Trade Credit Demand: An Empirical Study from Cameroonian Firms

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