Economics at your fingertips  

Does the Caste of the Firm Owner Play a Role in Access to Finance for Small Enterprises? Evidence from India

Rajesh Raj S. N. and Subash Sasidharan ()

The Developing Economies, 2018, vol. 56, issue 4, 267-296

Abstract: This study examines whether caste affiliation influences the ability to obtain credit from institutional sources. We employ Fourth All India Census of Micro, Small and Medium Enterprises 2006–2007 data to empirically verify this relationship. We conduct an econometric analysis of loan outcomes by the caste affiliation of the firm owner and observe that firms owned by socially disadvantaged groups have a lower probability of obtaining formal credit even after controlling for differences in creditworthiness and other factors. Our results also show that discrimination by formal credit institutions extends to the amount of the loan sanctioned. These results thus suggest that affirmative action programs in India have not had much impact on credit market access for socially marginalized entrepreneurs, and policymakers should address this concern by introducing special programs and regulatory incentives to encourage banks and others to increase their lending toward these disadvantaged groups.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0012-1533

Access Statistics for this article

The Developing Economies is currently edited by Katsuji Nakagane

More articles in The Developing Economies from Institute of Developing Economies Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2019-04-07
Handle: RePEc:bla:deveco:v:56:y:2018:i:4:p:267-296