Regional cooperative banks, ecosystems and small and medium-sized enterprise financing: the importance of cognitive, social and geographic proximities

Bastien Bezzon, Geoffroy Labrouche and Rachel Levy ()
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Bastien Bezzon: UB - Université de Bordeaux
Geoffroy Labrouche: LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville
Rachel Levy: ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville, LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville

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Abstract: Purpose This study analyzes the role of regional cooperative banks in identifying and financing small and medium-sized enterprises (SMEs) from a proximity perspective. Access to finance is a major challenge for SMEs. Regional cooperative banks can remove this barrier based on cooperative bank's characteristics and geographic proximity to SMEs. Understanding the interplay between these financial actors and firms can contribute to a better support of SMEs development. Design/methodology/approach The results are based on a case study of eight SMEs located in southwestern France. Interviews were conducted with two regional cooperative funds and eight SMEs. The interview guide included questions related to the company, the projects financed and how financing was accessed. Findings Results reveal that a combination of three forms of proximity allows regional cooperative banks and SMEs to establish effective financing operations. They show that regional cooperative banks are key players in the existing financing mechanisms for SMEs. Such financing is often used to gain access to larger players at a later stage. The findings suggest the need for public policies that promote the integration of financing actors in regional ecosystems to advance SMEs' development. Originality/value This article examines how SMEs access financing, with a focus on regional cooperative banks, which have received little attention in the literature. Moreover, the relationships between these actors are studied through the lens of proximity. Regional cooperative banks are able to finance projects that may have been overlooked by traditional banks due to trust-building local dynamics.

Keywords: SME; Regional cooperative banks; Case study; Proximity (search for similar items in EconPapers)
Date: 2024-03-19
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Published in Journal of Small Business and Enterprise Development, 2024, ⟨10.1108/JSBED-07-2023-0337⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04517428

DOI: 10.1108/JSBED-07-2023-0337

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