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Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: evidence from Qatari MSME importers

Author

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  • Lanouar Charfeddine

    (Qatar University)

  • Mohamed Ismail Umlai

    (Qatar University)

  • Mazen El-Masri

    (Qatar University)

Abstract

This study investigates the role of financial literacy (FL), perceived access to finance (PAF), information communication technology (ICT) usage, and digitization in alleviating the level of credit constraint that micro, small, and medium enterprises (MSMEs) face in an emerging market. We draw on the economic research theories of human capital, knowledge-based view, and lifecycle hypothesis to explain the relationship between the variables. Using survey data collected from 333 MSME importers in Qatar—a country with heavy reliance on foreign goods—we find strong evidence that FL, PAF, ICT usage, and digitization are key determinants of Qatari MSME access to credit. In particular, PAF and FL are significant and have their expected signs in almost all the Probit regressions. For ICT usage and digitization, although they are key determinants of credit constraints, the findings are more sensitive and dependent on the type of financing and the resulting type of credit constraint.

Suggested Citation

  • Lanouar Charfeddine & Mohamed Ismail Umlai & Mazen El-Masri, 2024. "Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: evidence from Qatari MSME importers," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-37, December.
    • Handle: RePEc:spr:fininn:v:10:y:2024:i:1:d:10.1186_s40854-023-00557-4
    DOI: 10.1186/s40854-023-00557-4
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    Keywords

    Credit constraints; Financial literacy; Perceived access to finance; ICT usage; Digitization; Qatari MSMEs;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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