The Determinants of Firm Access to Credit in Latin America: Micro Characteristics and Market Structure

Presbitero, Andrea F.; Rabellotti, Roberta

doi:10.1111/ecno.12069

Cited by 14 publications

(15 citation statements)

References 57 publications

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“…The authors argue that productivity and export orientation improve the financial health of the firm. Presbitero and Rabellotti (2016) also find that the probability of being financially constrained is lower for productive firms. Further, Blumberg and Letterie (2008) provide evidence that banks' loans decisions depend on the entrepreneurs' credible commitments such as collateral and the provision of dependable information.…”

Section: Introductionmentioning

confidence: 68%

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Erdogan

2019

Economic Research-Ekonomska Istraživanja

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To contribute to the small and medium-sized enterprises (SMEs) financing literature, this paper uses a unique sample of 492 Turkish SMEs to analyse the firm-level determinants of SME perceptions of bank financing accessibility. Logistic regression results reveal that older and relatively more innovative firms are more positive about their ability to secure bank loans, as are SMEs that have longer relationships with their oldest banks. Firms with two owners are more inclined than firms with a single owner and firms with three or more owners to perceive accessing bank loans as easy. This finding signals that although bank loan applications of firms with two owners have higher credibility than those of firms with a single owner, having more than two owners creates more complex agency problems for banks. Compared with firms incurring a loss, firms that make a profit or break even perceive it to be easier to obtain bank financing. SMEs in the service industry are more positive about accessing bank loans than are firms in manufacturing and other industries.

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Section: Introductionmentioning

confidence: 68%

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Erdogan

2019

Economic Research-Ekonomska Istraživanja

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“…In other words, bank concentration may result in financing obstacles (Owen & Pereira, 2018 ). Nonetheless, some scholars argue that some level of concentration is necessary as market power may be necessary to invest in lending activities (Álvarez & Bertin, 2016 ; Presbitero & Rabellotti, 2016 ). In any case, bank concentration is not homogeneous within LATAM (Matos, 2017 ), and ‘FinTech’ may be a powerful tool to boost financial inclusion at a low cost, as shown by the multiple examples given earlier (e.g., ‘ Mi Billetera Móvil’ in Argentina).…”

Section: Discussion and Policy Implicationsmentioning

confidence: 99%

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

et al. 2021

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Despite great developmental efforts in recent decades, Latin America still presents high levels of poverty and inequality when compared to developed nations. As explored widely in the literature, one potential instrument to diminish these issues is financial inclusion, including the access and usage of financial services by all people. Specifically, this paper verifies if financial inclusion and technology adoption decrease the poverty headcount ratio and the Gini index (i.e., inequality) of 13 Latin America countries (Argentina, Bolivia, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, Panama, Paraguay, Peru, and Uruguay). To perform such analysis, an unbalanced panel dataset was built, and the Feasible Generalized Least Squares (FGLS) and the Limited Information Maximum Likelihood (LIML) techniques were employed. The results suggest that, in accordance with previous studies, financial inclusion is a powerful tool to tackle poverty and inequality. Additionally, the combined effects of financial inclusions and technology (i.e., mobile use) are also capable of decreasing the poverty and inequality levels. We discuss the policy implications of our findings and suggest a future research agenda.

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“…Hence, having a lower score from this index can be the reason why Slovakian microenterprises perceive more difficulties in gaining credits compared to Czech micro-firms. Moreover, some studies suggest that older firms encounter fewer credit constraints (Canton et al, 2013;Beck et al, 2006), make more credit applications (Presbitero & Rabellotti, 2016) and get more credits than for younger firms (Mudd, 2013;Dong & Men, 2014) According to Canton et al (2013) firms that have been operating for less than 10 years have the worst perception of loan accessibility. The reason is that being in business for longer allows enterprises to get more experience and to contact more people and institutions that encourage them (Thapa, 2015).…”

Section: Resultsmentioning

confidence: 99%

Barriers in Financing Microenterprises From the Perspective of Czech and Slovak Microentrepreneurs

Civelek

Ključnikov

Krištofík

et al. 2019

Journal of Business Economics and Management

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This paper compares how Czech and Slovak microentrepreneurs perceive the volume and ease of access to finance that they face. Having an adequate number of sources of finance and easier access to them can help improve both enterprise and country performance. Chi-square and Z score tests for population proportions were used to test hypotheses. 740 microenterprises from Czech Republic and 287 microenterprises from Slovakia were included for the analyses that were performed by this study. The results show that Czech microentrepreneurs feel they have more sources of finance and have easier access to them than their Slovak counterparts. These differences may in part be linked to other factors such as the experience and age of microentrepreneurs and micro-firms, amount of business loans and microfinancing organizations, credit interest rates and credit rejection rates, the relative degree of economic freedom, the volume of government guarantees, relative GDP levels, the quality of business environment and ease of doing business. Additionally, The Moran’s I spatial autocorrelation index was performed to evaluate influence of location on the perception of Czech and Slovak microenterprises that were located in different regions of both countries. The paper also discusses the results’ policy implications for governments and financial institutions.

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The Determinants of Firm Access to Credit in Latin America: Micro Characteristics and Market Structure

Cited by 14 publications

References 57 publications

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

Barriers in Financing Microenterprises From the Perspective of Czech and Slovak Microentrepreneurs

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