Ashiqur Rahman

Collateral requirements for SME loans: empirical evidence from the Visegrad countries

AbstractThe purpose of this paper is to examine the determinants of collateral for small and medium enterprises (SMEs) in the context of Visegrad countries: Czech Republic, Slovak Republic, Hungary and Poland. The data set for this paper was obtained from the Business Environment and Enterprise Performance Survey (BEEPS), which was conducted by the World Bank and the European Bank for Reconstruction and Development (EBRD) from 2012–2014. A binary logistic regression model with different specifications was employed to examine the effect of independent variables on the incidence of collateral. The results show that risky borrowers need to pledge collateral and the reduction of asymmetric information can lower the incidence of collateral for SMEs. Moreover, we find that female borrowers are more likely to pledge collateral than male borrowers are. The results also suggest that loans with a longer maturity are more likely to be collateralized than short-term loans. We find evidence that bank-borrower proximit...

Entrepreneurial Orientation In The Segment Of Micro-Enterprises: Evidence From Czech Republic

Abstract The objective of this comprehensive research is to identify and explore the dissimilarities of gender and education level of entrepreneurs and enterprises’ age with regards to entrepreneurial orientation (EO) in the segment of micro enterprises. All of the dimensions of EO are included such as innovativeness, risk taking, proactiveness, competitive aggressiveness and autonomy for our analysis. The data that we have used for this study, was collected by a structured questionnaire during 2015 in Czech Republic, and consists of 1141 small and medium-sized enterprises (SMEs) and 740 of them are defined as micro enterprises by using the definition of European Commission. The empirical results of our study indicates a that university educated micro-entrepreneurs are more innovative and autonomous comparing with lower educated micro-entrepreneurs and also younger micro firms are more innovative, risk taker and proactive than the older micro firms. However, our results do not show any significant differences between men and women in relation to the all components of EO. Our result can be explained by having higher percentage of university educated women micro entrepreneurs comparing with their men counterparts and education may have a substitution effect on the gender based differences in the segment of micro firms.

Does Bank Ownership Affect Relationship Lending : a Developing Country Perspective

In this paper we aim to explore how the type of bank ownership local private banks, government-owned banks (public banks) and foreign banks can affect relationship lending to small and medium enterprises (SMEs) by using a unique data set from Bangladeshi banking sector. We found that private banks differ from government-owned and foreign banks in terms of relationship lending and credit facilities to SMEs. More specifically, our results suggest that unlike government and foreign banks, private banks do consider soft information from relationship lending while setting up the loan spread to SMEs. We can also confirm that exclusive banking relationship or repeated banking with private banks can soften credit conditions (loan maturity and covenants). Moreover, we found empirical evidence that banking relationship is important for private banks in terms of SME credit risk evaluation. Finally, as according to our expectation, the results confirm that regardless of prior relationship, private banks are more Received: December, 2016 1st Revision: February, 2017 Accepted: April, 2017 DOI: 10.14254/20718330.2017/10-1/20 Journal of International Studies S ci en ti fi c P a pe rs

Determinants of SME Finance: Evidence from Three Central European Countries

Abstract This paper explores the determinants of access to finance for small and medium enterprises (SMEs) in the context of three Central European countries: Czech Republic, Slovak Republic, and Hungary. The data set of the research is obtained from the BEEPS survey, which is conducted by the World Bank and the European Bank for Reconstruction and Development. This paper empirically analyses firms not only from the SMEs point of view, but also shows results for micro, small and medium enterprises separately. Additionally, we have analysed the determinants of access to finance for SMEs at each country level for an in-depth understanding of country-level variations in SME financing. The results indicate that micro firms and firms owned and operated by women are experiencing a shortage of credits from banks. On the other hand, we found a positive relationship between the pledge of collateral and access to finance. With respect to the medium firms, we found evidence that innovative firms have a larger amount of credit from banks. The empirical results also suggest that the loan size increases as the interest rates increase in particular for SMEs on the whole and for micro-firms, although the interest rate is in a negative relationship with the loan size in Czech Republic.