Credit counselling: a contemporary strategy for survival of micro small and medium-sized enterprises in under-developed financial markets post COVID-19 pandemic

George Okello Candiya Bongomin, Elie Chrysostome, Jean-Marie Nkongolo-Bakenda and Pierre Yourougou

Journal of Entrepreneurship and Public Policy, 2024, vol. 13, issue 2, 200-233

Abstract: Purpose - The main purpose of this paper is to establish the mediating effect of credit counselling in the relationship between access to microcredit and survival of micro small and medium-sized enterprises (MSMEs) in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda. Design/methodology/approach - Structural equation modelling (SEM) through SmartPLS 4.0 was used to generate the standardized parameters to test whether credit counselling mediates the relationship between access to microcredit and survival of MSMEs in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda. Findings - The SEM bootstrap results revealed that credit counselling enhances access to microcredit by 27% to promote survival of MSMEs in developing countries in sub-Saharan Africa post COVID-19 pandemic with data collected from rural Uganda. Research limitations - The current study focused only on women MSMEs. Future studies may possibly collect data from all the MSMEs to draw better generalization of the findings within the sector. Practical implications - The findings can help public finance policy to ensure provision of credit counselling to microentrepreneurs who borrow from different financial institutions to reduce the problem of loan defaults and delinquency rampant in lending. This could be done through conducting routine business education and counselling sessions for microentrepreneurs who often need credit to grow their businesses. Originality/value - This study is amongst the first few studies to establish the mediating effect of credit counselling in the relationship between access to microcredit and survival of MSMEs in developing countries in sub-Saharan Africa in the aftermath of COVID-19 pandemic with data collected from rural Uganda. There is a dearth in literature and theory on the rehabilitative and preventive role of credit counselling in reducing repayment defaults amongst borrowers within the credit market to spur survival of MSMEs seen as the main enabler of economic growth, especially in developing countries. In fact, credit counselling acts as a safety net by substituting financial literacy and education to solve the rampant problem of overindebtedness amongst borrowers who are debt illiterate within the credit market.

Keywords: Credit counselling; Survival of MSMEs post COVID-19 pandemic; Overindebtedness; Financial stress; Theory of planned behaviour; Public finance policy (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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: https://EconPapers.repec.org/RePEc:eme:jepppp:jepp-06-2023-0053

DOI: 10.1108/JEPP-06-2023-0053

Access Statistics for this article

More articles in Journal of Entrepreneurship and Public Policy from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().