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Cash flow vs. collateral-based credit: performance of micro, small and medium-sized firms in transition economies
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SYSNO ASEP 0391848 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Článek ve WOS Title Cash flow vs. collateral-based credit: performance of micro, small and medium-sized firms in transition economies Author(s) Cassano, F. (GB)
Joeveer, K. (EE)
Švejnar, Jan (NHU-C) RIDSource Title Economics of Transition - ISSN 0967-0750
Roč. 21, č. 2 (2013), s. 269-300Number of pages 32 s. Publication form Print - P Language eng - English Country GB - United Kingdom Keywords micro, small and medium-sized enterprises ; bank credit ; firm performance Subject RIV AH - Economics R&D Projects GAP402/10/2130 GA ČR - Czech Science Foundation (CSF) Institutional support NHU-C - PRVOUK-P23 UT WOS 000316320000003 DOI 10.1111/ecot.12016 Annotation We study factors affecting micro, small and medium-sized enterprises (MSMEs) receiving loans and the effect of these loans on MSMEs performance. We study two types of loans a new type based on cash flows and a traditional-style loan based on collateral. We use unique surveys of MSMEs from Bulgaria, Georgia, Russia and Ukraine. We find that MSMEs receiving a cash flow or collateral loan in the past are more likely to receive the same type of loan (and larger sized) in the future and that cash flow loans may be the preferred form of credit. Both types of loans are related positively to most performance indicators, enabling the MSMEs for instance to be more profitable and expand production. The cash flow loans also appear to be particularly attractive credit delivery schemes for micro and small enterprises. Finally, the effects of the smallest loans are often negative, suggesting that the minimum loan size is an important policy issue. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2014
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