IDEAS home Printed from https://ideas.repec.org/p/dls/wpaper/0080.html
   My bibliography  Save this paper

SME Access to Credit in Guatemala and Nicaragua: Challenging Conventional Wisdom with New Evidence

Author

Listed:
  • Ricardo Bebczuk

    (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) - FCE - UNLP)

Abstract

This paper develops a conceptual framework and offers new statistical evidence on the access to credit by micro, small, and medium enterprises (MSMEs) in Guatemala and Nicaragua. To this end, and after reviewing the existing literature on the topic, it produces new empirical evidence drawn from the official Household Survey and the World Bank’s Investment Climate Survey, conducted in both countries in 2006. The core contribution of the paper lies in the critical revision of three pieces of common knowledge, namely: (1) A large fraction of MSMEs has an excess demand for credit; (2) In the presence of credit market failures, governments must and actually do assist MSMEs in gaining access to loan facilities; and (3) Alternative credit instruments, such as leasing, factoring, microcredit, and third-party guarantee schemes, can be a suitable and massive solution for the lack of financing. Our analysis refutes to a large extent these assertions and advances some basic policy prescriptions that should help improve the resource allocation and impact of specific MSME financial programs.

Suggested Citation

  • Ricardo Bebczuk, 2009. "SME Access to Credit in Guatemala and Nicaragua: Challenging Conventional Wisdom with New Evidence," CEDLAS, Working Papers 0080, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0080
    as

    Download full text from publisher

    File URL: http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas80.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Thorsten Beck & Asli Demirgüç-Kunt & Maria Soledad Martinez Peria, 2008. "Banking Services for Everyone? Barriers to Bank Access and Use around the World," World Bank Economic Review, World Bank Group, vol. 22(3), pages 397-430, November.
    2. Mariana Marchionni & Leonardo Gasparini, 2007. "Tracing out the effects of demographic changes on the income distribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 97-114, April.
    3. Leonardo Gasparini, 2006. "Assessing benefit-incidence results using decompositions. The case of health policy in Argentina," Economics Bulletin, AccessEcon, vol. 4(40), pages 1-10.
    4. Leonardo Gasparini, 2005. "Protección Social y Empleo en América Latina: Estudio sobre la Base de Encuestas de Hogares," CEDLAS, Working Papers 0017, CEDLAS, Universidad Nacional de La Plata.
    5. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    6. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    7. Galindo, Arturo & Micco, Alejandro, 2004. "Do state owned banks promote growth? Cross-country evidence for manufacturing industries," Economics Letters, Elsevier, vol. 84(3), pages 371-376, September.
    8. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    9. Leonardo Gasparini & Walter Sosa Escudero, 2003. "Implicit Rents from Own-housing and Income Distribution: Econometric Estimates for Greater Buenos Aires," Journal of Income Distribution, Journal of Income Distribution, vol. 12(1-2), pages 3-3, June.
    10. Adriana Conconi & Guillermo Cruces & Sergio Olivieri & Raúl Sánchez, 2008. "E pur si muove? Movilidad, pobreza y desigualdad en América Latina," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 121-159, January-D.
    11. Leonardo Gasparini, 2005. "Income Inequality in Latin America and the Caribbean: Evidence from Household Surveys," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 29-57, January-D.
    12. Martín Cicowiez, 2002. "Comercio y Desigualdad Salarial en Argentina: Un Enfoque de Equilibrio General Computado," Department of Economics, Working Papers 040, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    13. Ricardo N. Bebczuk, 2008. "Dolarización y Pobreza en Ecuador," CEDLAS, Working Papers 0066, CEDLAS, Universidad Nacional de La Plata.
    14. Ricardo Bebczuk & Francisco Haimovich, 2007. "MDGs and Microcredit: An Empirical Evaluation for Latin American Countries," CEDLAS, Working Papers 0048, CEDLAS, Universidad Nacional de La Plata.
    15. Martín Cicowiez & Leonardo Gasparini & Federico Gutierrez & Leopoldo Tornarolli, 2006. "Areas Rurales y Objetivos de Desarrollo del Milenio en America Latina y el Caribe," CEDLAS, Working Papers 0043, CEDLAS, Universidad Nacional de La Plata.
    16. Leonardo Gasparini & Francisco Haimovich & Sergio Olivieri, 2007. "Labor Informality Effects of a Poverty-Alleviation Program," CEDLAS, Working Papers 0053, CEDLAS, Universidad Nacional de La Plata.
    17. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2010. "Crime Distribution and Victim Behavior during a Crime Wave," NBER Chapters,in: The Economics of Crime: Lessons for and from Latin America, pages 175-204 National Bureau of Economic Research, Inc.
    18. Bebczuk,Ricardo N., 2003. "Asymmetric Information in Financial Markets," Cambridge Books, Cambridge University Press, number 9780521793421.
    19. Leonardo Gasparini & Facundo Crosta & Francisco Haimovich & Beatriz Alvarez & Andrés Ham & Raúl Sánchez, 2008. "Un Piso de Protección Social en América Latina: Costos Fiscales e Impactos Sociales," CEDLAS, Working Papers 0071, CEDLAS, Universidad Nacional de La Plata.
    20. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
    21. Mariana Viollaz, 2008. "Polarización de ingresos laborales. Argentina 1992 – 2006," CEDLAS, Working Papers 0070, CEDLAS, Universidad Nacional de La Plata.
    22. Leonardo Gasparini & Matías Horenstein & Sergio Olivieri, 2006. "Economic Polarisation in Latin America and the Caribbean: What do Household Surveys Tell Us?," CEDLAS, Working Papers 0038, CEDLAS, Universidad Nacional de La Plata.
    23. Sebastian Galiani & Daniel Heymann & Carlos Dabus & Fernando Tohme, 2005. "Land-Rich Economies, Education and Economic Development," Working Papers 85, Universidad de San Andres, Departamento de Economia, revised Dec 2005.
    24. Leonardo Gasparini & Francisco Haimovich & Hernán Winkler, 2006. "Distribución del Ingreso en América Latina: Explorando las Diferencias entre Países," CEDLAS, Working Papers 0034, CEDLAS, Universidad Nacional de La Plata.
    25. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934 Elsevier.
    26. Carolina Díaz-Bonilla & Hans Lofgren & Martin Cicowiez, 2008. "Public Policies for the MDGs: The Case of the Dominican Republic," CEDLAS, Working Papers 0072, CEDLAS, Universidad Nacional de La Plata.
    27. Paula Giovagnoli & Georgina Pizzolitto & Julieta Trías, 2005. "Monitoring the Socio-Economic Conditions in Chile," CEDLAS, Working Papers 0019, CEDLAS, Universidad Nacional de La Plata.
    28. Sebastian Galiani & Federico Weinschelbaum, 2012. "Modeling Informality Formally: Households And Firms," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 821-838, July.
    29. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers 0078, CEDLAS, Universidad Nacional de La Plata.
    30. Francisco Haimovich & Hernán Winkler, 2005. "Pobreza Rural y Urbana en Argentina: Un Análisis de Descomposiciones," CEDLAS, Working Papers 0024, CEDLAS, Universidad Nacional de La Plata.
    31. Walter Sosa Escudero & Anil K. Bera, 2008. "Tests for Unbalanced Error Component Models Under Local Misspecication," CEDLAS, Working Papers 0065, CEDLAS, Universidad Nacional de La Plata.
    32. Martín Guzmán & Ezequiel Molina, 2006. "Desigualdad e Instituciones en una Dimensión Intertemporal," CEDLAS, Working Papers 0042, CEDLAS, Universidad Nacional de La Plata.
    33. Martín Cicowiez & Luciano Di Gresia & Leonardo Gasparini, 2007. "Políticas Públicas y Objetivos de Desarrollo del Milenio en la Argentina," CEDLAS, Working Papers 0056, CEDLAS, Universidad Nacional de La Plata.
    34. Canavire-Bacarrezao, Gustavo Javier & Urna Soria , Luís Fernando, 2009. "Unemployment Duration and Labor Mobility in Argentina: a Socioeconomic-based pre- and post-crisis Analysis," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 12, pages 169-217, Octubre.
    35. Matías Horenstein & Sergio Olivieri, 2004. "Polarización del Ingreso en la Argentina: Teoría y Aplicación de la Polarización Pura del Ingreso," CEDLAS, Working Papers 0015, CEDLAS, Universidad Nacional de La Plata.
    36. Ricardo Bebczuk, 2001. "Pautas para el diseño de un sistema de garantía estatal de préstamos para pequeñas y medianas empresas," Department of Economics, Working Papers 036, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    37. Ricardo N. Bebczuk, 2004. "What Determines the Access to Credit by SMEs in Argentina?," Department of Economics, Working Papers 048, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    38. Javier Alejo, 2006. "Desigualdad Salarial en el Gran Buenos Aires: Una Aplicación de Regresión por Cuantiles en Microdescomposiciones," CEDLAS, Working Papers 0036, CEDLAS, Universidad Nacional de La Plata.
    39. Guillermo Cruces & Leonardo Gasparini, 2008. "Programas Sociales en Argentina: Alternativas para la Ampliación de la Cobertura," CEDLAS, Working Papers 0077, CEDLAS, Universidad Nacional de La Plata.
    40. Adriana Conconi & Andres Ham, 2007. "Pobreza Multidimensional Relativa. Una Aplicación a la Argentina," CEDLAS, Working Papers 0057, CEDLAS, Universidad Nacional de La Plata.
    41. Matías Busso & Martín Cicowiez & Leonardo Gasparini, 2005. "Ethnicity and the Millennium Development Goals in Latin America and the Caribbean," CEDLAS, Working Papers 0027, CEDLAS, Universidad Nacional de La Plata.
    42. Beck, Thorsten & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2008. "Financing patterns around the world: Are small firms different?," Journal of Financial Economics, Elsevier, vol. 89(3), pages 467-487, September.
    43. Walter Sosa-Escudero & Mariana Marchionni & Omar Arias, 2011. "Sources of Income Persistence: Evidence from Rural El Salvador," Journal of Income Distribution, Journal of Income Distribution, vol. 20(1), pages 3-28, March.
    44. Georgina Pizzolitto, 2005. "Poverty and Inequality in Chile: Methodological Issues and a Literature Review," CEDLAS, Working Papers 0020, CEDLAS, Universidad Nacional de La Plata.
    45. Gasparini, Leonardo & Alejo, Javier & Haimovich, Francisco & Olivieri, Sergio & Tornarolli, Leopoldo, 2007. "Poverty among the Elderly in Latin America and the Caribbean," MPRA Paper 42957, University Library of Munich, Germany.
    46. Héctor Zacaria & Juan Ignacio Zoloa, 2006. "Desigualdad y Pobreza entre las Regiones Argentinas: Un Análisis de Microdescomposiciones," CEDLAS, Working Papers 0039, CEDLAS, Universidad Nacional de La Plata.
    47. Bebczuk, Ricardo N., 2007. "Access to credit in Argentina," Financiamiento para el Desarrollo 188, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    48. Gasparini Leonardo & Leonardo Tornaroli, 2009. "Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, September.
    49. Mariana Marchionni & Walter Sosa-Escudero & Javier Alejo, 2008. "Efectos Distributivos de Esquemas Alternativos de Tarifas Sociales: Una Exploración Cuantitativa," CEDLAS, Working Papers 0069, CEDLAS, Universidad Nacional de La Plata.
    50. Pablo Acosta & Leonardo Gasparini, 2007. "Capital Accumulation, Trade Liberalization, and Rising Wage Inequality: The Case of Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 793-812.
    51. Thorsten Beck & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2005. "Financial and Legal Constraints to Growth: Does Firm Size Matter?," Journal of Finance, American Finance Association, vol. 60(1), pages 137-177, February.
    52. Leonardo Gasparini & Federico Gutiérrez & Guido G. Porto, 2005. "Trade and Labor Outcomes in Latin America's Rural Areas: A Cross-Household Surveys Approach," CEDLAS, Working Papers 0025, CEDLAS, Universidad Nacional de La Plata.
    53. Mariana Marchionni, 2005. "Labor Participation and Earnings for Young Women in Argentina," CEDLAS, Working Papers 0029, CEDLAS, Universidad Nacional de La Plata.
    54. Gasparini, Leonardo C. & Pinto, Santiago M., 2006. "Equality of opportunity and optimal cash and in-kind policies," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 143-169, January.
    55. Federico H. Gutierrez, 2004. "Dinámica salarial y ocupacional Análisis de panel para Argentina 1998-2002," CEDLAS, Working Papers 0011, CEDLAS, Universidad Nacional de La Plata.
    56. Leopoldo Tornarolli, 2007. "Metodología para el Análisis de la Pobreza Rural," CEDLAS, Working Papers 0058, CEDLAS, Universidad Nacional de La Plata.
    57. Mariana Marchionni & Walter Sosa-Escudero & Javier Alejo, 2008. "La Incidencia Distributiva del Acceso, Gasto y Consumo de los Servicios Públicos," CEDLAS, Working Papers 0067, CEDLAS, Universidad Nacional de La Plata.
    58. Mariana Marchionni & Adriana Conconi, 2008. "¿Qué y a quién? Beneficios y beneficiarios de los programas de transferencias condicionadas de ingresos," CEDLAS, Working Papers 0076, CEDLAS, Universidad Nacional de La Plata.
    59. Ricardo N. Bebczuk, 2008. "Financial Inclusion in Latin America and the Caribbean: Review and Lessons," CEDLAS, Working Papers 0068, CEDLAS, Universidad Nacional de La Plata.
    60. Leonardo Gasparini & Martín Cicowiez, 2005. "Meeting the Poverty-Reduction MDG in the Southern Cone," CEDLAS, Working Papers 0023, CEDLAS, Universidad Nacional de La Plata.
    61. Matías Busso & Federico Cerimedo & Martín Cicowiez, 2005. "Pobreza, Crecimiento y Desigualdad: Descifrando la Última Década en Argentina," CEDLAS, Working Papers 0021, CEDLAS, Universidad Nacional de La Plata.
    62. Leonardo Gasparini & Ezequiel Molina, 2006. "Income Distribution, Institutions and Conflicts: An Exploratory Analysis for Latin America and the Caribbean," CEDLAS, Working Papers 0041, CEDLAS, Universidad Nacional de La Plata.
    63. Mariana Marchionni & Germán Bet & Ana Pacheco, 2007. "Empleo, Educación y Entorno Social de los Jóvenes: Una Nueva Fuente de Información," CEDLAS, Working Papers 0061, CEDLAS, Universidad Nacional de La Plata.
    64. Leonardo Gasparini & Federico Gutiérrez & Leopoldo Tornarolli, 2007. "Growth And Income Poverty In Latin America And The Caribbean: Evidence From Household Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 209-245, June.
    65. Leopoldo Tornarolli & Adriana Conconi, 2007. "Informalidad y Movilidad Laboral: Un Análisis Empírico para Argentina," CEDLAS, Working Papers 0059, CEDLAS, Universidad Nacional de La Plata.
    66. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
    67. Georgina Pizzolitto, 2007. "Curvas de Engel de Alimentos, Preferencias Heterogéneas y Características Demográficas de los Hogares: Estimaciones para Argentina," CEDLAS, Working Papers 0045, CEDLAS, Universidad Nacional de La Plata.
    68. Gabriel Sánchez & María Laura Alzúa & Inés Butler, 2008. "Impact of Technical Barriers to Trade on Argentine Exports and Labor Markets," CEDLAS, Working Papers 0079, CEDLAS, Universidad Nacional de La Plata.
    69. Leonardo Gasparini & Mariana Marchionni & Federico Gutierrez, 2004. "Simulating Income Distribution Changes in Bolivia: a Microeconometric Approach," CEDLAS, Working Papers 0012, CEDLAS, Universidad Nacional de La Plata.
    70. Marcelo Bérgolo & Fedora Carbajal, 2008. "Brecha Urbano - Rural de Ingresos Laborales en Uruguay para el Año 2006: Una Descomposición por Cuantiles," CEDLAS, Working Papers 0075, CEDLAS, Universidad Nacional de La Plata.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ricardo N. Bebczuk, 2008. "Financial Inclusion in Latin America and the Caribbean: Review and Lessons," CEDLAS, Working Papers 0068, CEDLAS, Universidad Nacional de La Plata.
    2. Maribel Jimenez & Monica Jimenez, 2009. "La Movilidad Intergeneracional del Ingreso: Evidencia para Argentina," CEDLAS, Working Papers 0084, CEDLAS, Universidad Nacional de La Plata.
    3. María Noelia Garbero, 2012. "Un análisis de los efectos de las restricciones de liquidez en la acumulación de capital humano: Evidencia para Nicaragua," CEDLAS, Working Papers 0136, CEDLAS, Universidad Nacional de La Plata.
    4. Bebczuk, Ricardo N., 2010. "Acceso al financiamiento de las PYMES en Argentina: estado de situación y propuestas de política," Financiamiento para el Desarrollo 227, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. María Noelia Garbero, 2012. "Efectos de las restricciones de liquidez en la acumulación de capital humano: evidencia para Nicaragua," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 53-95, January-D.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dls:wpaper:0080. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Pacheco). General contact details of provider: http://edirc.repec.org/data/funlpar.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.