Obstacles to Bank Financing of Micro and Small Enterprises: Empirical Evidence from the Pacific with some Policy Implications
Abstract
In recognizing on one hand the importance of the micro and small enterprise (MSE) sector for the growth and development of economies in the Pacific subregion and on the other, the financing constraints of the sector, the authors surveyed a group of MSEs in a Pacific island country and found that the sector may be particularly constrained by bank interest rates, fees and charges, and collateral requirements. This situation holds implications for policy, and the authors propose an initiative led by the banking sector to improve the situation. Keeping in mind an economy's specific financial, regulatory, economic and ...
View more >In recognizing on one hand the importance of the micro and small enterprise (MSE) sector for the growth and development of economies in the Pacific subregion and on the other, the financing constraints of the sector, the authors surveyed a group of MSEs in a Pacific island country and found that the sector may be particularly constrained by bank interest rates, fees and charges, and collateral requirements. This situation holds implications for policy, and the authors propose an initiative led by the banking sector to improve the situation. Keeping in mind an economy's specific financial, regulatory, economic and other structures and circumstances, voluntary or mandatory, it seems as if direct or indirect bank involvement appears vital. The implications for economic growth and development are considerable.
View less >
View more >In recognizing on one hand the importance of the micro and small enterprise (MSE) sector for the growth and development of economies in the Pacific subregion and on the other, the financing constraints of the sector, the authors surveyed a group of MSEs in a Pacific island country and found that the sector may be particularly constrained by bank interest rates, fees and charges, and collateral requirements. This situation holds implications for policy, and the authors propose an initiative led by the banking sector to improve the situation. Keeping in mind an economy's specific financial, regulatory, economic and other structures and circumstances, voluntary or mandatory, it seems as if direct or indirect bank involvement appears vital. The implications for economic growth and development are considerable.
View less >
Journal Title
Asia-Pacific Development Journal
Volume
19
Issue
2
Publisher URI
Copyright Statement
Self-archiving of the author-manuscript version is not yet supported by this journal. Please refer to the journal link for access to the definitive, published version or contact the author for more information.
Subject
Financial Economics
Applied Economics
Political Science