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MSMEs Financing in Burundi and its Welfare Effect

Author

Listed:
  • Janvier Nkurunziza

    (UNCTAD, Genève)

Abstract

The business sector in Burundi is dominated by small firms, with a median firm size of seven permanent workers. This has implications for firm resilience, access to resources, productivity and welfare. Large firms are more resilient, more productive, offer higher wages and other job-related benefits, and have a better access to resources. The question explored in this paper is whether supporting MSMEs in a fragile state like Burundi could increase welfare. This issue should be analyzed using panel data, which is not yet available. Relying on cross-sectional data, there are indications that welfare could not be improved just through the provision of loans to MSMEs. Other channels could include the fostering of female entrepreneurship, increasing training, helping firms to grow, and focusing aid on MSMSEs outside the capital city where entrepreneurship suffers from the urban bias.

Suggested Citation

  • Janvier Nkurunziza, 2016. "MSMEs Financing in Burundi and its Welfare Effect," BeFinD Working Papers 0111, University of Namur, Department of Economics.
    • Handle: RePEc:nam:befdwp:0111
    as

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    File URL: http://www.befind.be/publications/WPs/wp11
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    References listed on IDEAS

    as
    1. Sleuwaegen, Leo & Goedhuys, Micheline, 2002. "Growth of firms in developing countries, evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 68(1), pages 117-135, June.
    2. Sam Jones & John Page & Abebe Shimeles & Finn Tarp & John Page & Måns Söderbom, 2015. "Is Small Beautiful? Small Enterprise, Aid and Employment in Africa," African Development Review, African Development Bank, vol. 27(S1), pages 44-55, October.
    3. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
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    More about this item

    Keywords

    Burundi; welfare; firms;
    All these keywords.

    JEL classification:

    • I - Health, Education, and Welfare
    • L - Industrial Organization
    • O - Economic Development, Innovation, Technological Change, and Growth

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