The Financing of Small and Medium-Sized Enterprises:

An Analysis of the Financing Gap in Brazil

Research output: Contribution to journalArticleScientificpeer-review

Abstract

While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics, market structure and variations of interest rate spreads across banks and time. Moreover, as banks retreat from SME financing, we examine the potential for SMEs to seek new sources of financing from private equity and venture capital funds. We examine the changes in the availability of bank loans between 2014 and 2016. By considering demand, we estimate the SME loan gap based on Central Bank and publicly available data. Our results show that the loan gap in Brazil is substantial.
Original languageEnglish
JournalEuropean Business Organization Law Review
Publication statusAccepted/In press - Dec 2019

Fingerprint

small and medium-sized enterprise
Brazil
bank
loan
equity
outside financing
venture capital
central bank
interest rate
indebtedness
Financing
Small and medium-sized enterprises
finance
economic growth
demand
market

Keywords

  • Bank loans, Entrepreneurial financing, Interest rate SME funding

Cite this

@article{a40ee14c63994df8b67c21e53441aa31,
title = "The Financing of Small and Medium-Sized Enterprises:: An Analysis of the Financing Gap in Brazil",
abstract = "While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics, market structure and variations of interest rate spreads across banks and time. Moreover, as banks retreat from SME financing, we examine the potential for SMEs to seek new sources of financing from private equity and venture capital funds. We examine the changes in the availability of bank loans between 2014 and 2016. By considering demand, we estimate the SME loan gap based on Central Bank and publicly available data. Our results show that the loan gap in Brazil is substantial.",
keywords = "Bank loans, Entrepreneurial financing, Interest rate SME funding",
author = "{Mc Cahery}, Joseph and {Godke Veiga}, Marcelo",
year = "2019",
month = "12",
language = "English",
journal = "European Business Organization Law Review",
issn = "1566-7529",
publisher = "Baikal National University of Economics and Law",

}

TY - JOUR

T1 - The Financing of Small and Medium-Sized Enterprises:

T2 - An Analysis of the Financing Gap in Brazil

AU - Mc Cahery, Joseph

AU - Godke Veiga, Marcelo

PY - 2019/12

Y1 - 2019/12

N2 - While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics, market structure and variations of interest rate spreads across banks and time. Moreover, as banks retreat from SME financing, we examine the potential for SMEs to seek new sources of financing from private equity and venture capital funds. We examine the changes in the availability of bank loans between 2014 and 2016. By considering demand, we estimate the SME loan gap based on Central Bank and publicly available data. Our results show that the loan gap in Brazil is substantial.

AB - While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to external financing, we focus on the role of bank characteristics, market structure and variations of interest rate spreads across banks and time. Moreover, as banks retreat from SME financing, we examine the potential for SMEs to seek new sources of financing from private equity and venture capital funds. We examine the changes in the availability of bank loans between 2014 and 2016. By considering demand, we estimate the SME loan gap based on Central Bank and publicly available data. Our results show that the loan gap in Brazil is substantial.

KW - Bank loans, Entrepreneurial financing, Interest rate SME funding

M3 - Article

JO - European Business Organization Law Review

JF - European Business Organization Law Review

SN - 1566-7529

ER -