Determinants of Access to Bank Financing in SMEs in Mexico (original) (raw)

Journal of Risk and Financial Management

Several empirical studies indicate that the lack of financing is one of the main barriers that affects the economic growth of small and medium enterprises (SMEs). The main objective of this investigation was to determine to what extent the economic sector, the enterprise size, the characteristics inherent to the enterprise, the legal status, the variables linked to the performance of the enterprise, and the attributes of the owner influence the access to the bank financing of SMEs in Mexico. Using a discrete-response probit regression model, the impact of enterprise characteristics on the probability of obtaining a bank loan was determined. The data collected are from the Enterprise Surveys of Mexico, carried out by the World Bank. The sample of 1480 enterprises is representative by enterprise size, by economic sector, and by region. The research has a quantitative approach with a correlational scope, and a nonexperimental and transectional design. One of the main results highlights...

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Constraints of Small and Medium Enterprises Access To Bank Loans: Evidence from Vietnam Manufacturing Firms

Academy of Accounting and Financial Studies Journal, 2020

Small and Medium Enterprises (SMEs) have played an important role in Vietnam’s economic development. They are not only offering employment but also promoting innovative ideas. However, they are facing many constraints in accessing resources. Especially, financial constraints have been hindering their performance and their growth. This paper employs the probit and logit regression methods to evaluate factors that are important in determining SMEs’ access to bank loans in Vietnam. Based on the sample of 695 firms in Vietnam’s Manufacturing Sector that are directly collected by structured questionnaires, findings from the study show that: the size of firm, the collateral requirements, the cost of bribes and gifts, and high interests are main constraints to bank loans for most firms, especially SMEs. There are still marked discrimination in processing loan application (such as scale of firm, type of ownership). The firm performance and development of capital markets are positive factors...

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Financial Barriers to SME Growth Empirical Evidence from Kosova

This paper provides an overview of the financial obstacles of small and medium sized enterprises (SMEs) in Kosova which is based upon an SME survey conducted by Riinvest Institute at the end of 2002. The survey identified financing (lack of capital, high interest rates, high bank requirements, short repayment period) to be one of the key barriers to hinder SME growth. Logit-probit regressions are employed in order to identify and measure the impact of different factors on increasing the probability of the firm to obtain a loan. Results from the econometric model confirm that the larger the firm the higher probability of getting a loan and vice versa. Age of the firm also increases the probability of the firm to get a loan. These findings tested empirically theory that smaller firms are credit rationed in the market place as a result of information asymmetry and lack of sufficient available capital to meet the needs of SMEs. The findings urge the need for appropriate government policies regarding small firm finance in Kosova.

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External Financing for Small and Medium Enterprises and Socio-Economic and Financial Factors of Sme Operator

TIJ's Research Journal of Social Science & Management - RJSSM, 2017

Despite the creation and establishment of different external sources of fund for the development of Small and Medium Scale Enterprises (SMEs) in Nigeria, finance still remain the major problem due to accessibility challenges. This limiting the contribution of the SME subsector to the economic development. Some of the existing studies showed the effect of financial constraints on SMEs development, while some revealed the contribution of the various financing schemes to SMEs development using secondary data but not much on SMEs accessibility to funds in Nigeria. Hence, the study investigated the influence of the socio-economic and financial factors of the SME operators in accessing intervention fund. The study made use of primary data sourced with the aid of a well-structured questionnaire administered purposively on 400 SMEs Operators in the study area. The data were analyzed using logit regression model and descriptive statistics. Logit-regression result revealed significant relatio...

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What have we learned from the ENterprise Surveys Regarding Access to Finance by SMEs? Enterprise Analyisis Unit of the Worldbank, manuscript

2012

Using a unique firm level data – Enterprise Surveys- we develop a new measure of credit constrained status for firms using hard data instead of perceptions data. We classify firms into 4 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. In particular we look at firm size as a potential determinant of credit constrained status. First, we find that SMEs are more likely to be credit constrained (either partially or fully) than large firms. Furthermore, they 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 measured by labor productivity are less likely to be credi...

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Influence of Entrepreneur and Firm Characteristics in Accessing Bank finance

Journal of Entrepreneurship & Project management, 2021

SMEs are mostly guided by the owners’ characteristics which is an indicator of the level of decisions taken in the firm. Access to credit is a prerequisite for a high performance of an SME. The paper aimed at establishing the empirical link between entrepreneurs and firm characteristics and access to bank financing by SMEs in Eldoret town. Descriptive and explanatory research designs were employed in the study. A chi-square test of association was used to determine the relationship between study variables. The study findings indicated that gender and number of employees had a significant influence on access to bank financing. Male entrepreneurs are more likely to get bank financing compared to their female counterparts, while an increase in the number of employees increases the success rate of getting bank financing. However, age, education, business form, number of years of operation, stage of business and average turnover were found to be insignificant in obtaining funding. The st...

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Determinant Factor of Small Medium Enterprises to Access Bank Credit

Jurnal Ilmiah Akuntansi, 2021

This study aims to identify the determinant factors of bank credit access to small and medium enterprises. As the country's economy's backbone, the facts do not make SMEs free from capital constraints. Although the Government of Indonesia has issued a policy regarding lending through financial institutions, it turns out that this support has not played a significant role in encouraging SMEs to obtain bank credit. This research was conducted in Banyumas Regency, with the research respondents being SMEs who had already received credit. The study results found that financial literacy, credit terms, and quality information accounting affect bank credit access. It is concluded that limited access to bank credit can be improved if SMEs understand financial literacy, credit requirements, and accounting information quality.

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