Access to credit and informality among micro and small enterprises (MSEs) in Ethiopia

Ayana Aga, Gemechu and Reilly, Barry (2011) Access to credit and informality among micro and small enterprises (MSEs) in Ethiopia. International Review of Applied Economics, 25 (3). pp. 313-329. ISSN 0269-2171

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Abstract

This paper examines the determinants of MSEs access to credit in Ethiopia using detailed firm-level data collected in 2003. Its basic purpose is to identify various attributes of a firm that predict its ac- cess to credit with emphasis on the role of informality. We find that informal firms are more credit constrained compared to formal firms. A firm's location, membership of a business association and maintain- ing an accounting record are found to be important determinants of access to credit. Further, we find firms whose owners have vocational training are more credit constrained than those who are not, as are firms that are exclusively male-owned. There is no systematic relation between access to credit and a firm's age, size and the sector in which it operates. The paper concludes with possible policy interventions designed to improve access to credit for MSEs in Ethiopia.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: Gemechu AyanaAga
Date Deposited: 06 Feb 2012 18:27
Last Modified: 27 Mar 2012 09:19
URI: http://sro.sussex.ac.uk/id/eprint/16435
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