IDEAS home Printed from https://ideas.repec.org/a/ibn/ijbmjn/v15y2021i8p93.html
   My bibliography  Save this article

Factors Determining the Credit Accessibility by the Small-Scale Entrepreneurs: A Case of Handloom Weaving in Bangladesh

Author

Listed:
  • Mst Tania Parvin
  • Kanij Fatema
  • Sadika Haque

Abstract

This study examines the determinants of access to credit by the handloom weavers in Bangladesh. Using the multistage sampling technique, the primary data for the analysis were collected from 311 randomly selected handloom weavers from Sirajganj district of Bangladesh during July to December 2015. The data are analyzed by using the Logit model. The model identifies several individual, household, community, and institution-specific factors as the significant determinants of credit access. Among them, family size, farm size, work experience, saving and the flexibility in the terms and conditions of loan use increase the probability of credit access by the handloom weavers whereas the risk aversion attitude and the distance between the Microfinance Institutions (MFIs) from the commune reduce such possibility. Therefore, this study suggests that respondents should utilize the joint effort of the available family members in this labor-intensive business while undertaking rational decisions enhanced through the skills and capabilities acquired over the years. They should maintain a sufficient amount of saving to prove them eligible in repaying their credit. From the institutional perspective, it is suggested that the MFIs should provide adequate financial and non-financial services to its clientele as per their needs. Borrowers’ easy accessibility to the institutions should also be ensured. In doing so, they should open up more branches in the villages so that the door to door services are available to the borrowers. It is expected that these recommendations will help in improving the credit access by the handloom weavers in Bangladesh.

Suggested Citation

  • Mst Tania Parvin & Kanij Fatema & Sadika Haque, 2021. "Factors Determining the Credit Accessibility by the Small-Scale Entrepreneurs: A Case of Handloom Weaving in Bangladesh," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(8), pages 1-93, July.
    • Handle: RePEc:ibn:ijbmjn:v:15:y:2021:i:8:p:93
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ijbm/article/download/0/0/43212/45259
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ijbm/article/view/0/43212
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Reardon & Eric Crawford & Valerie Kelly, 1994. "Links Between Nonfarm Income and Farm Investment in African Households: Adding the Capital Market Perspective," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(5), pages 1172-1176.
    2. McNamara, Kevin T. & Weiss, Christoph, 2005. "Farm Household Income and On- and Off-Farm Diversification," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 37-48, April.
    3. Tom Hertz, 2009. "The effect of nonfarm income on investment in Bulgarian family farming," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 161-176, March.
    4. Gelos, R. Gaston & Werner, Alejandro M., 2002. "Financial liberalization, credit constraints, and collateral: investment in the Mexican manufacturing sector," Journal of Development Economics, Elsevier, vol. 67(1), pages 1-27, February.
    5. Sharma, Manohar & Zeller, Manfred, 1997. "Repayment performance in group-based credit programs in Bangladesh: An empirical analysis," World Development, Elsevier, vol. 25(10), pages 1731-1742, October.
    6. Pitt , Mark M., 2000. "The Effect of Non-agricultural Selfemployment Credit on Contractual Relations and Employment in Agriculture: The Case of Microcredit Programmes in Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 26(2-3), pages 15-48, June-Sept.
    7. Charmaine Motsoari & Philippus C Cloete & Herman D van Schalkwyk, 2015. "An analysis of factors affecting access to credit in Lesotho's smallholder agricultural sector," Development Southern Africa, Taylor & Francis Journals, vol. 32(5), pages 592-602, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tuan Nguyen-Anh & Nguyen To-The & Song Nguyen-Van, 2021. "Economic impacts of political ties in Vietnam: evidence from Northern rural households," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 993-1021, October.
    2. Hohfeld, Lena & Waibel, Hermann, 2013. "Investments of Rural Households in Northeast Thailand and the Future of Small Scale Farming," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(3), pages 1-20, August.
    3. Jehovaness Aikaeli & Martin Julius Chegere & John Rand, 2023. "Complementarity and substitutability between farm and nonfarm activities: Evidence from agricultural households in Tanzania," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 89-111, February.
    4. Talip Kilic & Calogero Carletto & Juna Miluka & Sara Savastano, 2009. "Rural nonfarm income and its impact on agriculture: evidence from Albania," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 139-160, March.
    5. Benjamin Davis & Paul Winters & Thomas Reardon & Kostas Stamoulis, 2009. "Rural nonfarm employment and farming: household‐level linkages," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 119-123, March.
    6. Mishra, K., 2018. "You are Approved! Insured Loans Improve Credit Access and Technology Adoption of Ghanaian Farmers," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277089, International Association of Agricultural Economists.
    7. Cowling, Marc, 2010. "The role of loan guarantee schemes in alleviating credit rationing in the UK," Journal of Financial Stability, Elsevier, vol. 6(1), pages 36-44, April.
    8. Boncinelli, Fabio & Bartolini, Fabio & Casini, Leonardo, 2018. "Structural factors of labour allocation for farm diversification activities," Land Use Policy, Elsevier, vol. 71(C), pages 204-212.
    9. Dufhues, Thomas & Buchenrieder, Gertrud & Quoc, Hoang Dinh & Munkung, Nuchanata, 2011. "Social capital and loan repayment performance in Southeast Asia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 679-691.
    10. Kristin J. Forbes, 2007. "The Microeconomic Evidence on Capital Controls: No Free Lunch," NBER Chapters, in: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences, pages 171-202, National Bureau of Economic Research, Inc.
    11. Yuhuan Jin & Sheng Zhang, 2019. "Credit Rationing in Small and Micro Enterprises: A Theoretical Analysis," Sustainability, MDPI, vol. 11(5), pages 1-15, March.
    12. Li Gan & Manuel A. Hernandez & Yanyan Liu, 2018. "Group Lending With Heterogeneous Types," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 895-913, April.
    13. Aga, B.K. & Tesfay, G.B., 2018. "How Should Rural Financial Cooperatives Be Best Organized? Evidence from Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277735, International Association of Agricultural Economists.
    14. Keil, Alwin & Saint-Macary, Camille & Zeller, Manfred, 2013. "Intensive Commercial Agriculture in Fragile Uplands of Vietnam: How to Harness its Poverty Reduction Potential while Ensuring Environmental Sustainability?," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(1), pages 1-25, February.
    15. José María Serena & Ricardo Sousa, 2017. "Does exchange rate depreciation have contractionary effects on firm-level investment?," BIS Working Papers 624, Bank for International Settlements.
    16. Urban, Jörg, 2020. "Credit cycles revisited," Working Paper Series in Economics 146, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    17. Grootaert, Christiaan, 1999. "Social capital, houshold welfare, and poverty in Indonesia," Policy Research Working Paper Series 2148, The World Bank.
    18. Arslan, Ozgur & Florackis, Chrisostomos & Ozkan, Aydin, 2006. "The role of cash holdings in reducing investment-cash flow sensitivity: Evidence from a financial crisis period in an emerging market," Emerging Markets Review, Elsevier, vol. 7(4), pages 320-338, December.
    19. Johanna Hietalahti & Mikael Linden, 2006. "Socio-economic impacts of microfinance and repayment performance: a case study of the Small Enterprise Foundation, South Africa," Progress in Development Studies, , vol. 6(3), pages 201-210, July.
    20. Caggese, Andrea, 2007. "Testing financing constraints on firm investment using variable capital," Journal of Financial Economics, Elsevier, vol. 86(3), pages 683-723, December.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ijbmjn:v:15:y:2021:i:8:p:93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.