scholarly journals SME credit constraints and access to informal credit markets in Vietnam

2020 ◽  
Vol 47 (6) ◽  
pp. 787-807 ◽  
Author(s):  
Lan Archer ◽  
Parmendra Sharma ◽  
Jen-Je Su
Keyword(s):  
Peer Review ◽  
Credit Markets ◽  
Credit Constraints ◽  
Policy Implications ◽  
Informal Credit ◽  
Banking Services ◽  
Content Type ◽  
Credit Access ◽  
Access Policy ◽  
Correlated Random Effects

PurposeA review of literature has documented that accessing formal credit and other banking services has always been a crucial challenge for small and medium-sized enterprises (SMEs). The alternative, therefore, tends to be informal channels. However, the credit constraint vis-à-vis informal channel link does not appear to be well documented in the literature. This study aims to investigate whether credit constraints significantly affect the probability of accessing informal credit, as well as the credit values of Vietnamese SMEs.Design/methodology/approachThis study uses a trinary approach and correlated random-effects Probit and Tobit techniques to avoid the incidental coefficients problem.FindingsThe results suggest that relative to unconstrained and partially constrained firms, fully constrained firms tend to be more active in the informal credit markets, shown by their higher probability of informal credit access and larger credit values.Originality/valueTo the best of authors’ knowledge, this is the first study on Vietnam that takes a different approach to credit constraints and examines their impact on informal credit access. Policy implications arise and are discussed.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2017-0543

The impact of informal credit on rural agricultural productivity in the savannah ecological zone of Ghana

2019 ◽  
Vol 11 (2) ◽  
pp. 301-315
Author(s):  
Samuel Sekyi ◽  
Paul Bata Domanban ◽  
George Kwame Honya
Keyword(s):  
Agricultural Productivity ◽  
Farm Households ◽  
Baseline Survey ◽  
Current Debate ◽  
Ecological Zone ◽  
Informal Credit ◽  
Content Type ◽  
Credit Access ◽  
Rural Ghana ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of informal credit access on agricultural productivity in rural Ghana. Design/methodology/approach Data sets from the Ghana Feed the Future baseline survey involving a total sample of 2,437 rural farm households were used. In order to address the problem of endogeneity and sample selectivity bias, the endogenous switching regression (ESR) model was employed to examine whether rural farm households’ with access to informal credit and those without access differ in terms of their productivity levels and whether access to informal credit affects agricultural productivity. Findings Estimates from the ESR show that access to informal credit significantly promotes agricultural productivity. Specifically, farmers with access to informal credit were able to achieve a yield of 48.42 kg/ha more than their counterparts without informal credit access. In terms of the counterfactual, farmers without informal credit access would have increased their yield by 57.61 kg/ha if they were to have access to informal credit. Research limitations/implications The study was restricted to the savannah ecological zone of Ghana. This limits the extent of generalisation of results. Originality/value This study provides a rigorous econometric analysis of the impacts of access to informal credit on agricultural productivity in rural Ghana. The study contributes to the current debate on the link between access to informal credit and agricultural productivity and provides valuable input for policymakers.

Consumer financial distress during economic downturn: evidence from five provinces of Zimbabwe

2020 ◽  
Vol 47 (9) ◽  
pp. 1123-1142
Author(s):  
Richard Chamboko ◽  
Rumbidzai K.T. Chamboko
Keyword(s):  
Peer Review ◽  
Financial Distress ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Economic Downturn ◽  
Least Squares Regression ◽  
Content Type ◽  
Factors Associated ◽  
Equality Of Means ◽  
Behavioural Factors

PurposeDespite the inescapable picture of hardships and circumstances in Zimbabwe, there has not been dedicated research focused on understanding the management of household finances, particularly to assess financial distress and how it varies among Zimbabweans. This study aims to use survey data to measure financial distress and ascertain the socioeconomic, demographic and behavioural factors associated with it among Zimbabweans.Design/methodology/approachA sample of 1,006 survey respondents from five provinces of Zimbabwe was used. The principal component analysis approach was used to create a composite financial distress score. The t-test for the equality of means and analysis of variance were used to test for the difference in financial distress between groups, whilst the ordinary least squares regression was used to determine the factors associated with financial distress after controlling for other factors.FindingsThe study found that consumer financial distress was mainly explained by locality (urban/rural and province), frequency and level of income (informality) and age. Having saved in the past 12 months did not significantly differentiate savers from non-savers on financial distress. The study also found that gender, level of education, marital status, role in household financial decision-making and role in household provisioning were not significant predictors of financial distress.Research limitations/implicationsThe findings have policy implications, especially for the government of Zimbabwe, its agencies and local authorities. Enacting policies that create opportunities for inclusive and sustainable livelihoods and economic growth should be the priority. In addition, instituting favourable policies that allow informal business to grow, formalise and integrate with the formal economy may help to sustainably grow the economy and alleviate the financial hardships among consumers. For consumers, adopting financial behaviours that ensure that they live within their means cannot be over emphasised.Originality/valueThis is the first paper to profile the socioeconomic, demographic and behavioural factors associated with financial distress during the economic downturn among the impoverished Zimbabweans.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2019-0640.

Filling the voids left by the formal sector: informal borrowings by poor households in northern mountainous Vietnam

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nguyen Huu Thu ◽  
Pham Bao Duong ◽  
Nguyen Huu Tho
Keyword(s):  
Low Income ◽  
Poverty Reduction ◽  
The Body ◽  
Policy Implications ◽  
Primary Data ◽  
Formal Sector ◽  
Rural Finance ◽  
Informal Credit ◽  
Content Type ◽  
Poor Households

PurposeThis study aims to examine the accessibility, loan purposes and effects of informal credits on poor households in Northern mountainous Vietnam.Design/methodology/approachThis study used primary data collected directly from surveying 402 poor households in Thai Nguyen province using a well-designed questionnaire. The probit model is employed to specify which factors affect access to informal credit, the tobit model is used to estimate the borrowing functions specified. In addition, descriptive statistical analysis is also used to describe the accessibility, purposes and effects of informal credit on poor households.FindingsThe results show that there is a considerably high proportion of informal borrowings from relatives, neighboring villagers, professional moneylenders, rotating saving and credit groups, trade credits and mortgages. Labor force ratio, social capital and residential land areas are the key determinants of poor households' informal borrowings. The purposes of borrowing are diverse. The informal loans also have certain significant effects on poverty reduction and the welfare of poor households.Research limitations/implicationsThe effects of the informal loans on house welfare should be quantitatively evaluated.Practical implicationsThe findings from these analyses allow us to draw relevant policy implications for the development of rural finance in other low-income, developing countries.Originality/valueThis research contributes to the body of published literature in several ways. Firstly, it provides understanding of the performance of the informal financial subsector. Secondly, the informal subsector of rural finance is evaluated in close relation to the formal subsector.

scholarly journals The interrelationships among the formal, semiformal and informal credit demands of farm households in Vietnam

2021 ◽  
Vol 48 (5) ◽  
pp. 776-791
Author(s):  
Nguyen Tuan Anh ◽  
Christopher Gan ◽  
Dao Le Trang Anh
Keyword(s):  
Credit Markets ◽  
Smallholder Farmers ◽  
Probit Model ◽  
Farm Households ◽  
Red River Delta ◽  
Informal Credit ◽  
Content Type ◽  
Access To Credit ◽  
Credit Demand ◽  
Practical Implications

Purpose This study simultaneously explores the nexus among formal, semiformal and informal credit markets and farm households' credit demand determinants in Vietnam. Design/methodology/approach This study uses a multistage stratified random sampling process for a survey of 648 smallholder farmers in the Red River Delta (RRD), Vietnam. The trivariate probit model (TVPM) is used to address the interdependence of farm households' credit demands in different credit markets. Findings The results reveal complementary relationships among two pairs of credit markets (formal versus informal and semiformal versus informal). There are dissimilarities among the determinants (household characteristics, household head's characteristics, credit history and geographic factors) of farm households' credit demands in different markets, reflecting segmentation of Vietnam credit markets. Practical implications The study's empirical findings are important for policymakers and credit providers to enhance farm households' access to credit for agriculture and to improve the operations of the three credit markets. Originality/value This is the first empirical study in Vietnam and one of few in other developing countries simultaneously exploring the determinants of credit demand in and interrelationships among all three credit markets to provide more comprehensive and accurate results.

Income and Employment Potential for Youth and Women in Tanzania’s Micro, Small and Medium Tourism Enterprises

2021 ◽  
Vol 48 (2) ◽  
pp. 507-527
Author(s):  
Jehovaness Aikaeli
Keyword(s):  
Small And Medium Enterprises ◽  
Tourism Industry ◽  
Policy Implications ◽  
Youth Employment ◽  
Credit Access ◽  
Access Policy ◽  
Tourism Sector ◽  
Tourism Enterprises ◽  
Employment Potential ◽  
Medium Enterprises

Abstract This paper looks into the income and employment potential for youth and women in tourism micro, small and medium enterprises (MSME s). The survey data collected from seven regions of Tanzania during September–October 2018 is used. Analyses are focused on two main issues: estimation of determinants of income in tourism MSME s and implications for youth and women employment; and examination of perceived youth employment potential in the tourism industry of Tanzania. Quantile regression approach is applied in estimation of determinants of income; and the ratios of perceived employment potential and constraints to the youth employment are analysed. The findings demonstrate earning as the leading employment incentive and is determined by education of the owners of MSME s, inter alia. Larger proportion of enterprises owned by youth than those owned by elderly people are informal, which has a negative bearing on incomes of youth. Women and youth owned enterprises are constrained in terms of credit access. Policy implications include the need to address the social problem of gender inequality, enhancing requisite skills and knowledge for tourism sector professions, and formalisation and scaling up of credit access for the youth and women.

Effects of credit constraints on rural household technical efficiency

2014 ◽  
Vol 6 (4) ◽  
pp. 654-668 ◽  
Author(s):  
Jianmei Zhao ◽  
Peter J. Barry
Keyword(s):  
Technical Efficiency ◽  
Credit Constraints ◽  
Rural Households ◽  
Northern China ◽  
Rural Household ◽  
Policy Implications ◽  
Supply Side ◽  
Demand Side ◽  
Tobit Regression ◽  
Content Type

Purpose – The purpose of this paper is to evaluate the effects of access to formal credit on rural household technical efficiency in China. Design/methodology/approach – Based on the rural household survey data in Weifang city, Shandong province in northern China, the authors apply recent developed bootstrapped DEA approach to investigate rural technical efficiency at the household level under the consideration of off-farm activities. Rural households are then identified as credit constrained and classified as supply-side and demand-side credit constraints by applying direct elicitation method. Finally, the authors apply a tobit regression to examine the effects of credit constraints on household technical efficiency. Findings – Rural households in China not only suffer supply-side credit constraints, but also demand-side credit constraints resulted from the transaction costs and risk rationing. The tobit regression discloses that demand-side credit constraints impose significant negative impacts on household technical efficiency. Originality/value – The authors clarify the definition of credit constraints and classify the credit constraints into supply-side and demand-side credit constraints. The results of this paper have significant policy implications for rural finance policies in China.

Microfinance through non-governmental organizations and its effects on formal and informal credit

2014 ◽  
Vol 6 (2) ◽  
pp. 182-197 ◽  
Author(s):  
Cheng Xiang ◽  
Xiangping Jia ◽  
Jikun Huang
Keyword(s):  
Empirical Evidence ◽  
Financial Institutions ◽  
Rural China ◽  
Policy Implications ◽  
Data Set ◽  
Informal Credit ◽  
Content Type ◽  
Governmental Organizations ◽  
The Poor ◽  
Non Governmental Organizations

Purpose – Internationally, microfinance run by non-governmental organizations (NGOs) is often considered an important approach to meeting the credit demand of rural households, particularly among the poor. However, the perceived competitions with formal financial institutions and concerns about financial risks in the rural economy have impeded the development of microfinance by NGOs in China. Despite these concerns about NGO microfinance, little empirical evidence has been brought to prove them. The purpose of this paper is to provide empirical evidence of the relationship between NGO microfinance and farmers’ demand for formal and informal credit in rural China. Design/methodology/approach – The study is based on a household longitudinal data set consisting of 749 households from 40 microfinance villages in rural China. This study draws evidence from China's largest NGO microfinance. Out of the five county branches where China Foundation for Poverty Alleviation has launched institutionalized microfinance since 2006, the authors selected two of them. A random sampling approach was applied in surveying villages and households. In an effort to create impact assessments, the authors surveyed the detailed information on household characteristics and credit access during the period 2006-2009. A panel data is thus structured for the analysis. Findings – The authors found that the demand for credit in rural China is immense and rising, as formal financial institutions have gradually moved away from less developed regions in rural areas. In its place, informal lending has become a primary source of credit for the poor. However, where NGO microfinance has become available, both formal and informal credit has slowed down. The development and expansion of NGO microfinance did stand up as a substitution for institutional lenders and informal financial networks. Research limitations/implications – The findings have profound policy implications. First, since the development of NGO microfinance fill the demand for credit in rural China and poses low financial risk, the intellectual bias against NGO microfinance is unwarranted. In particular, the regulations that hamper the development of NGO microfinance should be corrected. Second, informal networks do not appear to be costless. Where NGO microfinance can substitute for them, it can mitigate the financial stresses related to the informal credit market.

Study on high-temperature wear and mechanism of Al-Si/graphite composites prepared by the die-casting process

2020 ◽  
Vol 72 (10) ◽  
pp. 1153-1158 ◽  
Author(s):  
Yafei Deng ◽  
Xiaotao Pan ◽  
Guoxun Zeng ◽  
Jie Liu ◽  
Sinong Xiao ◽  
...  
Keyword(s):  
Friction Coefficient ◽  
Wear Rate ◽  
Peer Review ◽  
Die Casting ◽  
Casting Machine ◽  
Injection Pressure ◽  
Casting Process ◽  
Matrix Alloy ◽  
Content Type ◽  
The Matrix

Purpose This paper aims to improve the tribological properties of aluminum alloys and reduce their wear rate. Design/methodology/approach Carbon is placed in the model at room temperature, pour 680°C of molten aluminum into the pressure chamber, and then pressed it into the mold containing carbon felt through a die casting machine, and waited for it to cool, which used an injection pressure of 52.8 MPa and held the same pressure for 15 s. Findings The result indicated that the mechanical properties of matrix and composite are similar, and the compressive strength of the composite is only 95% of the matrix alloy. However, the composite showed a low friction coefficient, the friction coefficient of Gr/Al composite is only 0.15, which just is two-third than that of the matrix alloy. Similarly, the wear rate of the composite is less than 4% of the matrix. In addition, the composite can avoid severe wear before 200°C, but the matrix alloy only 100°C. Originality/value This material has excellent friction properties and is able to maintain this excellent performance at high temperatures. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/ILT-10-2019-0454/

Socioeconomic effects of pension spending: evidence from Spain

2020 ◽  
Vol 47 (5) ◽  
pp. 599-617
Author(s):  
Fernando Bermejo ◽  
Eladio Febrero ◽  
Andre Fernandes Tomon Avelino
Keyword(s):  
Peer Review ◽  
Social Protection ◽  
Pension System ◽  
Decomposition Analysis ◽  
Value Added ◽  
Total Output ◽  
Alternative View ◽  
Input Output ◽  
Structural Decomposition Analysis ◽  
Content Type

PurposeThe purpose of this study is to provide broader understanding of the significant role that the pension system has in the Spanish economy by estimating the sectoral production, employment and income sustained by pensioners' consumption.Design/methodology/approachBased on input–output tables by the World Input–Output Database and consumption data from the Household Budget Survey by the Spanish Statistical Office, a demoeconomic model is applied to quantify the direct impacts, indirect impacts from interindustry links and induced impacts from income–consumption connections over a nine-year period (2006–2014). Then, the factors driving the evolution of total output, employment and value added during such period have been examined by using structural decomposition analysis.FindingsThe growing participation of consumption by pensioner households in final demand had proven crucial during the 2008 crisis to alleviate the negative trend in production and employment derived from the collapse in consumption suffered by the rest of households.Practical implicationsDetermining the underlying factors driving changes in both employment and income during the 2008 crisis can be of interest in political decision-making on the sustainability of the Spanish pension system.Social implicationsThe results of estimating both the employment and income supported by pensioners' consumption reveal the significant stabilizing effect of the public spending on pensions, particularly during the 2008 crisis.Originality/valueThe current Spanish approach of attaining the pension system sustainability by merely reducing social protection costs ignores the adverse consequences of a lower pensioners' demand. This paper addresses an alternative view in which pension spending is not considered a burden on economic growth but rather a means of improving the level of production and employment.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2019-0047

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