Connectedness and SME Financing in Post-communist Economies: Evidence from Uzbekistan

Awduron Sefydliadau
Math Erthygl
Iaith wreiddiolSaesneg
Tudalennau (o-i)586-602
Nifer y tudalennau17
CyfnodolynJournal of Development Studies
Cyfrol51
Rhif y cyfnodolyn5
Dyddiad ar-lein cynnar16 Meh 2015
Dangosyddion eitem ddigidol (DOIs)
StatwsCyhoeddwyd - 30 Meh 2015
Cysylltiadau
Cysylltiad parhaol
Arddangos ystadegau lawrlwytho
Gweld graff cysylltiadau
Fformatau enwi

Crynodeb

This paper investigates effects of interpersonal links with bureaucrats on SME access to formal finance. A survey of 502 SMEs in post-communist Uzbekistan shows fewer SMEs with government connections express a need for external finance, but success rates of applications are higher than for SMEs without connections. Econometric models show government-connected SMEs receive more formal credit than their counterparts. The small share of SME credit available is thus distributed in favour of those capitalising on bureaucratic links, with consequent resource misallocation. Findings imply that greater SME credit flows need supplementing with capacity building that improves bank transparency and efficiency.