Publicação
Microcredit – Literature and Effectiveness to Reduce Micro and Small Firms’ Financial Constraints
| Resumo: | Financial constraints have been a constant research topic on the literature. For micro and small firms, their impact is particularly important considering their reliance on credit to survive. These firms are the responsible for much of the market dynamism. In this master dissertation, we aim to explore microcredit (MC) and microfinance (MF) as banking specialization to finance micro and small firms. Created by Professor Muhammad Yunus, MC’s concept arises in Bangladesh in 1970’s with the purpose of fighting poverty in less developed countries. Positive experiences in this context encouraged MC to be replicated in developed countries, where it can be addressed to support problems of micro and small firms’ financial constraints. These topics has been raising attention through the years. The United Nations Economics and Social Council declared the year 2005 as the “International Year of Microcredit”. In 2006 Yunus was awarded with the Nobel Peace Prize. Recently, in 2019, the Nobel Economic Prize was attributed to Abhijit Banerjee, Esther Duflo and Michael Kremer for their approach in alleviating global poverty. The dissertation is divided in two chapters. In the first we measure the academic productivity related to MC and MF aiming to identify research trends and empirical gaps. To do so, we conduct a bibliometric analysis considering business, economics, business finance and management research. Collecting data from Institute for Scientific Information (ISI) Web of Science, we separate research into three clusters: “Performance”, “the relationship between microcredit and entrepreneurs’ social characteristics” and “gender and entrepreneurship”. Exploring the performance cluster, our study reveals that MC and MF research are largely oriented to Microfinance Institutions (MFIs), given little attention to the borrowers’ perspective. Moreover, performance articles in the borrowers’ perspective reveal a lack of studies on developed countries. In the second chapter, we explore MC and MF as small business lending specialization and it effect on credit constraint’s mitigation. In order to explore the European context, we use a cross-country dataset collected from Survey on Access to Finance of Enterprises (SAFE) and complement with market and macroeconomic variables consulted on World Bank Development Indicators (WBDI). Our sample include information from 38 countries being nearly 95% developed countries, considering a time period between 2008 e 2018. Our findings reveal strong evidences that applying for a loan on an MFI reduces credit rationing for micro and small firms. However, we found that borrowers with past relationship lending with MFIs are more discouraged to apply for a new loan. |
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| Autores principais: | Ribeiro, João Paulo Coelho |
| Assunto: | Microfinance Institutions Microcredit Microfinance Credit Constraints Credit Rationing Credit Discouragement Micro and Small firms financing |
| Ano: | 2020 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | Instituto Politécnico do Porto |
| Idioma: | inglês |
| Origem: | Repositório Científico do Instituto Politécnico do Porto |
| Resumo: | Financial constraints have been a constant research topic on the literature. For micro and small firms, their impact is particularly important considering their reliance on credit to survive. These firms are the responsible for much of the market dynamism. In this master dissertation, we aim to explore microcredit (MC) and microfinance (MF) as banking specialization to finance micro and small firms. Created by Professor Muhammad Yunus, MC’s concept arises in Bangladesh in 1970’s with the purpose of fighting poverty in less developed countries. Positive experiences in this context encouraged MC to be replicated in developed countries, where it can be addressed to support problems of micro and small firms’ financial constraints. These topics has been raising attention through the years. The United Nations Economics and Social Council declared the year 2005 as the “International Year of Microcredit”. In 2006 Yunus was awarded with the Nobel Peace Prize. Recently, in 2019, the Nobel Economic Prize was attributed to Abhijit Banerjee, Esther Duflo and Michael Kremer for their approach in alleviating global poverty. The dissertation is divided in two chapters. In the first we measure the academic productivity related to MC and MF aiming to identify research trends and empirical gaps. To do so, we conduct a bibliometric analysis considering business, economics, business finance and management research. Collecting data from Institute for Scientific Information (ISI) Web of Science, we separate research into three clusters: “Performance”, “the relationship between microcredit and entrepreneurs’ social characteristics” and “gender and entrepreneurship”. Exploring the performance cluster, our study reveals that MC and MF research are largely oriented to Microfinance Institutions (MFIs), given little attention to the borrowers’ perspective. Moreover, performance articles in the borrowers’ perspective reveal a lack of studies on developed countries. In the second chapter, we explore MC and MF as small business lending specialization and it effect on credit constraint’s mitigation. In order to explore the European context, we use a cross-country dataset collected from Survey on Access to Finance of Enterprises (SAFE) and complement with market and macroeconomic variables consulted on World Bank Development Indicators (WBDI). Our sample include information from 38 countries being nearly 95% developed countries, considering a time period between 2008 e 2018. Our findings reveal strong evidences that applying for a loan on an MFI reduces credit rationing for micro and small firms. However, we found that borrowers with past relationship lending with MFIs are more discouraged to apply for a new loan. |
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