Access to Credit and Firm Ownership in South Africa
- 1 July 2006
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
Although South Africa' financial sector is well-developed, microenterprise managers see access to finance as a serious problem. Managers of black-owned microenterprises are more likely to see it as a problem - and are less likely to use bank financing - than white-owned microenterprises. Differences in access remain statistically significant and large even after controlling for observable enterprise characteristics. Adding additional variables to control for enterprise productivity, registration, and the presence of audited accounts reduces the size and statistical significance of the difference, but does not eliminate it. This suggests that either other unobserved differences (such as, the availability of collateral) or factors such as discrimination explain part of the difference in access to credit.Keywords
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