Deconstructing involuntary fnancial exclusion: a focus on African SMEs

Simba, A. ORCID: 0000-0002-0276-8211, Tajeddin, M., Dana, L. and Ribeiro Soriano, D.E., 2023. Deconstructing involuntary fnancial exclusion: a focus on African SMEs. Small Business Economics. ISSN 0921-898X

1753219_Simba.pdf - Published version

Download (714kB) | Preview


Small and medium-sized enterprises (SMEs) struggle to obtain credit when credit ratings and collateral are used as criteria to assess their credit applications. In the context of Africa, the financial markets have gaping institutional voids, and contextual insights into SMEs’ experiences remain underdeveloped. Drawing on the stakeholder-agency theory of debt financing, this paper advances the scholarly conversation by theorising about how collateral security, collateral security value and the gender of SME owners lead to the involuntary financial exclusion of many manufacturing businesses in Africa. Analysis of the World Bank Enterprise Survey (WBES) dataset reveals that collateral security and collateral security value, together with gender biases in Africa’s financial markets, reduce credit access potential. Consequently, SMEs’ perceptions of the likelihood of obtaining credit for business purposes are reduced. Empirical results for 13,783 SMEs across 41 African countries indicate that the motivations to apply for credit also diminish. These observations contribute to entrepreneurial financing and SME research.

Item Type: Journal article
Publication Title: Small Business Economics
Creators: Simba, A., Tajeddin, M., Dana, L. and Ribeiro Soriano, D.E.
Publisher: Springer Verlag
Date: 21 April 2023
ISSN: 0921-898X
Rights: © The Author(s) 2023. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit
Divisions: Schools > Nottingham Business School
Record created by: Laura Ward
Date Added: 24 Apr 2023 10:36
Last Modified: 24 Apr 2023 10:36

Actions (login required)

Edit View Edit View


Views per month over past year


Downloads per month over past year