SME finance and the construction of value in Rwanda
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 31 August 2017
Issue publication date: 6 August 2018
Abstract
Purpose
The purpose of this paper is to explore how entrepreneurs, banks, the government, and alternative lending respond to finance gaps for small and medium enterprises (SMEs). This paper considers valuation as a sociological construct where actors use different calculative devices, forming an assemblage that partly positions valuation of entrepreneurial finance as a contested and socially constructed process.
Design/methodology/approach
Drawing on the concept of “calculative devices”, the study articulates discursive institutional practices embedded within SME lending. This case study draws on analyses of 30 semi-structured interviews and archival data, government reports, and newspaper articles.
Findings
The study identified three triggers in Rwanda that were rooted in the informal and unincorporated nature of the SME governance structure, the lack of capacity for SME owners to manage their own projects, and normalising language around collateral requirements that marginalised the realities of SMEs, contributing to stagnation for SME finance.
Practical implications
The research provides direction for understanding how calculative devices create new forms of valuation of entrepreneurship in developing countries, particularly when human and non-human actors come together in an assemblage. The study calls for further research to demonstrate the embedded power of valuation practices and the performance of value in entrepreneurial finance.
Originality/value
The study brings new findings to the market creation literature by extending the notion of distributive calculative agency to SME finance. The study mobilises theory to interpret how discursive institutional practices are embedded within a country’s finance infrastructure, yielding unintended consequences for SME growth.
Keywords
Citation
van Klyton, A. and Rutabayiro-Ngoga, S. (2018), "SME finance and the construction of value in Rwanda", Journal of Small Business and Enterprise Development, Vol. 25 No. 4, pp. 628-643. https://doi.org/10.1108/JSBED-02-2017-0046
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited