Abstract

Small and medium-sized enterprises (SMEs) are fundamental to national economic development through poverty alleviation and employment creation. However, credit constraints severely challenge small and medium-sized enterprises’ (SMEs) performance. Therefore, this study aims to establish the link between credit constraints and the financial performance of SMEs. The paper further examines whether the differences in performance between constrained and unconstrained firms can contribute to poverty reduction. To this end, the endogenous switching regression was applied to the cross-sectional data from a firm-level survey involving 520 SMEs from Cameroon. The paper considered four credit constraint categories: risk, quantity, price, and transaction cost. Results reveal that 74% of SMEs are credit constrained, and the majority (43%) are quantity constrained. Interestingly, risk and price-constrained SMEs are mainly more profitable than unconstrained SMEs, while quantity and transaction-cost-constrained SMEs are less profitable than their counterparts. Consequently, the impact on poverty reduction is equally varied. The scholarly and policy implications of the study are that alleviating credit constraints among SMEs does not always augment the profitability of the SMEs and contributes towards poverty eradication.

中文翻译：

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信贷约束对中小企业财务绩效的影响

摘要

中小企业是扶贫、创造就业、国民经济发展的基础。然而，信贷紧缩对中小企业的绩效提出了严峻挑战。因此，本研究旨在建立信贷约束与中小企业财务绩效之间的联系。本文进一步研究了受约束和不受约束企业之间的绩效差异是否有助于减贫。为此，我们将内生转换回归应用于一项涉及喀麦隆 520 家中小企业的企业层面调查的横截面数据。本文考虑了四个信用约束类别：风险、数量、价格和交易成本。结果显示，74% 的中小企业面临信贷约束，而大多数 (43%) 的中小企业面临数量限制。有趣的是，风险和价格受限的中小企业主要比不受约束的中小企业盈利能力更高，而数量和交易成本受限的中小企业的盈利能力则低于同行。因此，对减贫的影响同样各不相同。该研究的学术和政策意义在于，减轻中小企业的信贷约束并不总是能提高中小企业的盈利能力并有助于消除贫困。