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Access to versus Use of Loans: What are the True Determinants of Access?

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  • Hainz, Christa
  • Nabokin, Tatjana

Abstract

Access to finance is a prerequisite for economic development. Existing studies measure access by the use of finance. We develop a direct measurement for access to finance from the Business Environment and Enterprise Performance Survey 2005 data. We determine whether a firm without a loan does not need one or is indeed credit-constrained. The determinants of access estimated in a Heckman selection model are compared with those of use. Our results show that firm age and sector effects do not influence access although they are significant in the use regression. The reasons are differences in demand.

Suggested Citation

  • Hainz, Christa & Nabokin, Tatjana, 2009. "Access to versus Use of Loans: What are the True Determinants of Access?," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 12, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec09:12
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    References listed on IDEAS

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    3. Hoekstra, Ruth, 2013. "Boosting Manufacturing Firms' Exports? The role of trade facilitation in Africa," IEE Working Papers 197, Ruhr University Bochum, Institute of Development Research and Development Policy (IEE).

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    More about this item

    Keywords

    Access to Finance; Use of Finance;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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