Obstacles to Bank Financing of Micro and Small Enterprises: Empirical Evidence from the Pacific with Some Policy Implications

2012, Journal of Asia Pacific Development, 19(2), 49–75.

25 Pages Posted: 10 Dec 2012 Last revised: 13 Mar 2013

See all articles by Parmendra Sharma

Parmendra Sharma

Griffith University

Neelesh Gounder

University of the South Pacific - Department of Economics; Griffith University - Department of Accounting, Finance and Economics

Date Written: September 1, 2011

Abstract

Recognizing on one hand the importance of the MSE sector for growth and development of economies in the Pacific region and on the other, the financing constraints of the sector, we survey a group of MSEs in a Pacific island country and find that they may particularly be constrained by banks’ interest rates, fees and charges, and collateral requirements. Policy implications emerge and this article proposes a banking sector led initiative. Keeping in mind an economy’s specific financial, regulatory, economic and other structures and circumstances, voluntary or mandatory, direct or indirect, bank involvement appears vital. Implications for economic growth and development are considerable.

Keywords: Fiji, Pacific, financing obstacles, micro and small enterprises (MSEs), bank loans

JEL Classification: G21, G28, O10, O16, O50

Suggested Citation

Sharma, Parmendra and Gounder, Neelesh, Obstacles to Bank Financing of Micro and Small Enterprises: Empirical Evidence from the Pacific with Some Policy Implications (September 1, 2011). 2012, Journal of Asia Pacific Development, 19(2), 49–75.. Available at SSRN: https://ssrn.com/abstract=2187212

Parmendra Sharma (Contact Author)

Griffith University ( email )

Department of Accounting Finance and Economics
Griffith business School
Brisbane, Queensland QLD 4111
Australia

Neelesh Gounder

University of the South Pacific - Department of Economics ( email )

Private Bag, Laucala Campus
Suva
Fiji

Griffith University - Department of Accounting, Finance and Economics ( email )

Parklands Drive
Brisbane, Queensland QLD 4215
Australia

HOME PAGE: http://www.fijianeconomy.com

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