Effects of credit constraints on the productivity of small and medium-sized enterprises in Cameroon

Serge Piabuo (), Francis Menjo Baye and Julius Chupezi Tieguhong

MPRA Paper from University Library of Munich, Germany

Abstract: This paper assesses the determinants and effects of credit constraints on the productivity of small and medium-sized enterprises (SMEs) in Cameroon. Use is made of the Cameroon enterprise survey data collected by the World Bank in 2009 and an endogenous switching regression model. Results show that interest rates, size of enterprise, size of loan, size of collateral, maturity of loans and legal status of enterprises are major sources of credit constraints faced by SMEs. Results also indicate that medium enterprises are more credit constrained than small enterprises; meanwhile the effects of credit constraints affect small enterprises more than medium enterprises. Credit constrained firms have lower levels of productivity relative to unconstrained firms. These results have implications for the creation of credit bureaux, prudential stringency and rationalization of the Cameroon tax system.

Keywords: Small and medium-sized enterprises; credit constraints; endogenous switching regression model; Cameroon tax system. (search for similar items in EconPapers)
JEL-codes: C4 C40 D1 D53 (search for similar items in EconPapers)
Date: 2015-06-22, Revised 2015-07-28
New Economics Papers: this item is included in nep-eff, nep-ent and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Journal of Economics and International Finance 2141 -6672.7(9)(2015): pp. 204-212

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