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Introduction: Micro and small and medium-sized enterprises (SMEs) represent approximately 99.7% of enterprises in the EU, USA, Japan and about 98.7% in the Republic of Moldova. They provide two-thirds of private sector jobs and contribute more than half of the total value added created by existing businesses. Under these conditions, various action programmes are adopted to increase the competitiveness of SMEs through research and innovation and to improve access to finance. In addition, the impact of the COVID-19 pandemic has stimulated new reflections on economic recovery, reconstruction and strengthening the resilience of SMEs.

Aim: This chapter aims to give an overview of the SME development, the credit market, access to finance and leasing and to analyse the regulatory framework in terms of quantitative and qualitative criteria for SME classification and the advantages and shortcomings of credit guarantees in the Republic of Moldova. Moreover, in doing this it aims to examine the credit market trends in the SMEs sector and their impact on SMEs’ performance and development.

Method: This chapter uses quantitative data for trend analyses in order to investigate the SMEs access to the credit market, the effectiveness of SME potential funding sources in the Republic of Moldova and the impact of the pandemic on SME development.

Findings: The study found significant and positive role of the credit market in the SME sector development and positive impact on SME performance and economic development. Thus, the study concluded that in order for SMEs to remain competitive and profitable it is very important that they focus on innovation and continuously seek ways to access financial resources on the credit market. During the recent financial crisis, numerous commercial banks focussed considerable attention to SME funding via lending facilities and programmes specifically dedicated to the SME sector.

Originality of the Study: This chapter provides evidence on SME access to finance on the Moldovan credit market over the 2015–2020 period by using statistics on credit to both financial and non-financial markets and offers new insights into the topic area by emphasising the importance of the SMEs financing portfolio for the Moldova economic development.

Implications: The results of this chapter suggest that the future research would be aided by improvements in the collection of more data on the pandemic period and new financial techniques and practical products available on the credit market of SME.

The purpose of this paper is to identify the proportion of farmers with constrained and unconstrained participation in the agricultural credit market and estimate the parameters that determine agricultural credit market participation in Finoteselam town, Ethiopia.

The study followed cross‐sectional study design where primary data were collected from 210 households through a questionnaire survey in Finoteselam town, north western Ethiopia. A combination of purposive and random sampling techniques was employed. Descriptive statistics were used to identify the proportion of farmers with different levels of participation in the agricultural credit market. The bivariate probit model was estimated to identify the parameters that determine smallholder credit market participation.

The study revealed that 48 percent of smallholder farmers are constrained non‐participating (i.e. rationed out) from the agricultural credit market due to lack of access to the service, 44.8 percent of them are constrained participating, 2.4 percent unconstrained participating and 4.8 percent of them are unconstrained non‐participating. Estimation results of the bivariate probit model indicated that variables such as high dependency burden, large landholding size, household's labor endowment, participation in off‐farm employment activities and incurring unforeseen expenses increased the probability of households to participate in agricultural credit markets. On the other hand, village dummy variable, old age of household head and borrowing from other sources decreased the probability of households participating in the agricultural credit market.

The findings raise policy concerns to devise a mechanism for creating a functioning rural insurance market, improve the labor market for encouraging off‐farm employment activities, devise wealth‐creating schemes and address the credit need of those smallholder farmers who are still rationed out from the agricultural credit market.

Little has been done on the subject of agricultural credit market participation in Ethiopia. Hence, this research will add to the thin literature on the subject.

This study conducts an empirical analysis of the relationship between credit market conditions and agriculture output in Sub-Saharan Africa.

This paper uses a two-stage least square instrumental variable and difference generalised method of moments dynamic panel model because potential reverse causation and endogeneity are addressed.

The findings show that better credit market conditions contribute to agriculture productivity. The results also show that better infrastructure and availability of agriculture inputs are associated with productivity improvements. The empirical results are robust when an alternative measure of agriculture productivity is used.

An important research agenda for future studies will be to consider alternative measures of credit market conditions and other intervening variables that influence the nexus. Besides, other methods that account for cross-sectional dependence could also be considered as the impact of credit on agriculture varies across the sub-regions.

The findings make a case for enhancing credit market access to boost agriculture productivity. There is also a need to implement financial education programs for farmers and ensuring continuous engagement with farmers.

Although the issue of agriculture finance has been well documented in the literature, few studies have estimated the elasticity of agriculture productivity to changes in credit conditions. Also, our consideration of the intervening role of infrastructure amongst others is an area that has remained relatively unexplored.

The purpose of this paper is to explore the impact of the credit expansion in 2009 and 2010 in China on the capital structure of listed real estate companies.

Chinese listed real estate companies are divided into two groups, state-owned and non-state-owned, because their access to credit markets have different priority to state-owned banks that dominate bank lending. The difference-in-differences approach is employed to test the impact of changes in leverage ratios and loan ratios before and after the credit expansion period in state-owned firms and non-state-owned firms.

Using quarterly panel regressions, the authors find that during the credit expansion period, state-owned companies exhibit a relatively greater increase in leverage ratios than non-state-owned firms. State-owned firms have greater increases in book leverage ratios, market leverage ratios and long-term debt ratios by 5.2, 4.9 and 1.1 per cent, respectively. It is also shown that loan ratios have increased more in state-owned firms than non-state-owned firms during the credit expansion period.

The paper explores only the impacts of credit expansion on capital structure of listed real estate firms in China. Further studies can be conducted to investigate the impact of credit supply on corporate investment decisions of real estate firms and on real estate markets.

The findings can help explain the surge in land and housing prices after 2008 in China. Deng et al. (2015) find that state-owned real estate firms paid more for land price than non-state-owned firms, which contributed to upward pressure on housing prices. This paper shows that such “over-investment” may be due to the increase of debt financing and availability of bank loans to real estate firms. Thus the credit market can affect real estate markets through debt financing at company level.

This paper is the first to investigate the impact of credit supply on capital structure of real estate companies, and presents evidence of the importance of credit supply as a determinant of capital structure.

Credit is central in labour allocation decisions in smallholder agriculture in developing countries. The purpose of this paper is to analyse the effect of credit constraints on farm households’ labour allocation decisions in rural Burkina Faso.

The study used a direct elicitation approach of credit constraints and applied a farm household model to categorize households into four labour market participation regimes. A joint estimation of both the multinomial logit model and probit model was applied on survey data from Burkina Faso to assess the effect of credit constraint on the probability of choosing one of the four alternatives.

The results of the probit model showed that households’ endowment of livestock, access to news, and membership to an farmer-based organization were factors lowering the probability of being credit constrained in rural Burkina Faso. The multinomial logit model results showed that credit constraints negatively influenced the likelihood of a farm household to use hired labour in agricultural production and perhaps more importantly it induces farm households to hire out labour off farm. The results also showed that the other components of household characteristics and farm attributes are important factors determining the relative probability of selecting a particular labour market participation regime.

Facilitating access to credit in rural Burkina Faso can encourage farm households to use hired labour in agricultural production and thereby positively impacting farm productivity and relieving unemployment pressures.

In order to identify the effect of credit constraints on farm households’ labour decisions, this study examined farm households’ decisions of hiring on-farm labour, supplying labour off-farm or simultaneously hiring on-farm labour and supplying family labour off-farm under credit constraints using the direct elicitation approach of credit constraints. To the best of the authors’ knowledge, this study is the first to examine this problem in Burkina Faso.

In the wake of the recent financial crisis, there has been extensive commentary regarding the rise and fall of REIT leverage, how much debt REITs should use, and the trendy “deleveraging” practice among REIT managers. The paper aims to discuss these issues.

Identifying the late 2000s credit crunch as a supply shock, the paper uses difference-in-difference methodology to isolate alternative firm financing strategies and investment decision responses to the shock.

Consistent with corporate survey results, this empirical analysis suggests that changes in capital structure are largely supply driven, and REIT managers “time” the debt market in response to credit conditions.

This research clarifies the causes of the documented leverage pattern and provides fresh insights about REIT capital structure.

The purpose of this paper is to explore the existence and determinants of the credit gap in the cinnamon value chain development in Northwestern Vietnam.

A multi-stage sampling of 548 cinnamon households and a Heckman Selection Model were applied to examine their credit access constraints. In-depth interviews with cooperatives, enterprises, banks and relevant government agencies were further conducted to explain the credit gap.

In the total 52.74 percent of households that received credit, 24.56 percent of them received an insufficient amount of credit as registered. In addition, 35.77 percent of total households are credit rationed. Although all enterprises and cooperatives had been successful in applying for credit as long as they have collateral, none of them received the full credit amount requested. The credit amount received satisfied 80.64, 43.03 and 44.28 percent of the demand by households, cooperatives and enterprises, respectively. The lack of valuable collateral assets is the most important factor explaining this credit gap. Moreover, membership in a farmer-based union or ownership of a bank account increases the probability of access to credit. Educated household heads with a larger farm size and the Kinh ethnic majority are positively associated with a larger amount of credit. Households with conventional cinnamon farming, more dependents and union non-membership are more likely to be credit rationed.

A reform on collateral management, facilitating access to bank accounts, capacity building for local farmer-based unions, organic certification, granting land use rights and facilitating a platform to share reliable information between relevant actors are needed to bridge the credit gap.

This paper analyses the determinants of credit access constraints by key actors in a medicinal plant value chain that was insufficiently discussed by previous studies in the field.

This study aims to examine the influence of stock liquidity on the trade credit of publicly listed companies in Saudi Arabia.

In this study various econometric models were used to test the data of 900 firms listed in Saudi Arabia during the period of 2010–2019.

The robust results of the various econometric models indicate that firms are more willing to offer trade credit to customers when stock liquidity is greater; however, they are less likely to rely on obtaining more payables from suppliers. The findings further indicate that payables and receivables are indeed related, but not exclusively, in the sense that more payables lead to more receivables. The study also reveals a pattern of persistence in payables and receivables during the period of study.

The sample of the present study is only made up of Saudi listed companies. Future research could extend the sample of this study taking into account listed firms in the Middle East and North Africa (MENA) region as a whole so as to gain more insights from the entire region including oil-producing and non–oil-producing countries. More studies are needed to further examine the impact of alternative options for credit access and their linkage to stock liquidity. Finally the difference in difference (DiD) method of analysis as quasi experimental method can be another extension of this research.

The findings would provide implications for managers and investors by recognizing the potential role of stock liquidity in affecting trade credit and understanding the association between the stock liquidity and trade credit. Management of the firms should look for the ways to enhance the stock liquidity of the firms so as to help in reducing the extreme debts usage and therefore, alternative source of funds can be available accordingly. Once the advantage of stock market is identified, firms' managers should search for chances and policies that can promote stock liquidity and hence make use of the advantages of being liquid.

This paper provides new evidence from the emerging market, particularly the Saudi Arabia. The attempt is one of the first in the region to broaden the knowledge about the effects of stock liquidity on trade credit. It provides market participants with insights on the role of stock liquidity in financial flexibility.

By drawing upon institutional theory, the purpose of this paper is to investigate the role of four critical resources (credit, electricity, contract enforcement and political governance) in explaining the quality of entrepreneurship and the depth of the supporting entrepreneurship ecosystem in Africa.

A quantitative approach based on ordinary least squares regression analysis was used. Three data sources were employed. First, the Global Entrepreneurship Index (GEI) of 35 African countries was used to measure the quality of entrepreneurship and the depth of the entrepreneurial ecosystem in Africa which represents the dependent variable. Second, the World Bank’s data on access to credit, electricity and contract enforcement in Africa were also employed as explanatory variables. Third, the Ibrahim Index of African Governance was used as an explanatory variable. Finally, country-specific data on four control variables (GDP, foreign direct investment, population and education) were gathered and analysed.

To support entrepreneurship development, Africa needs broad financial inclusion and state institutions that are more effective at enforcing contracts. Access to credit was non-significant and therefore did not contribute to the dependent variable (entrepreneurship quality and depth of entrepreneurial support in Africa). Access to electricity and political governance were statistically significant and correlated positively with the dependent variables. Finally, contract enforcement was partially significant and contributed to the dependent variable.

A lack of GEI data for all 54 African countries limited this study to only 35 African countries: 31 in sub-Saharan Africa and 4 in North Africa. Therefore, the generalisability of this study’s findings to the whole of Africa might be limited. Second, this study depended on indexes for this study. Therefore, any inconsistencies in the index aggregation if any could not be authenticated. This study has practical implications for the development of entrepreneurship in Africa. Public and private institutions for credit delivery, contract enforcement and the provision of utility services such as electricity are crucial for entrepreneurship development.

The institutional void is a challenge for Africa. This study highlights the weak, corrupt nature of African institutions that supposedly support MSME growth. Effective entrepreneurship development in Africa depends on the presence of a supportive institutional infrastructure. This study engages institutional theory to explain the role of institutional factors such as state institutions, financial institutions, utility providers and markets in entrepreneurship development in Africa.