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The problem of inaccessibility of finance for farm investment is a common phenomenon among farmers, especially the rural dwellers. Thus, there is a need to know how the accessibility of informal finance can be increased to increase farm investment. Therefore, this study evaluates farmers’ access to informal finance and its contribution to farm investment among rural farmers in Northcentral Nigeria.

A three-stage random sampling technique was employed to select 160 farmers. Primary data collected were analysed with descriptive statistics and the Heckman selection model.

The study revealed that cooperative society is the major informal means of loan acquisition used by the farmers followed by Rotational Savings and Credit Associations (RoSCAs). Informal loans contributed to agricultural investment through the various operational activities involved in production. Factors influencing farmers’ access to informal loans were the age, farm size and income of the farmers. Interest charged, farmers' age, farming experience, household size, education and loan duration were the drivers of the amount borrowed from the informal financing sector.

The findings of the study call for policies that will sustain informal financial institutions in developing economies, like Nigeria. Thus, the government through its regulatory agencies should assist informal finance providers with the necessary resources to achieve more goals. This is because the informal credit lenders help in bridging financial gaps created by formal financial institutions, such as commercial banks.

Unlike the previous research studies, this study investigated the driving factors of the amount borrowed from informal finance and its use in farm investment.

The purpose of this paper is to empirically investigate how women entrepreneurs in Tanzania assess their accessibility to different external financial sources. The aim is further to discuss financial preferences among this group of entrepreneurs.

The study is based on a unique database consisting of 114 firms, obtained by a questionnaire during 2009-2010. Differences between mean values on perceptions of financial sources were tested via a paired samples t-test.

Overall, the empirical results provide support for the hypothesis that the sampled women entrepreneurs perceive semi-formal capital, such as loans from MFIs, SACCOS, ROSCAS and VICOBA, as the most accessible external capital. Governmental subsidies are ranked second, followed by informal capital, such as loans from family, friends and investors. As expected, loans from formal banks are ranked as the least accessible financing alternative. However, there are strong indications that the entrepreneurs in our study, if given a choice, would prefer external capital from formal sources, rather than semi-formal or informal capital.

The authors suggest that the formal banks work to find ways to lower agency costs and thereby work for an inclusion of women entrepreneurs, and for the semi-formal financial actors to improve financial services in ways that better serve the entrepreneurs.

The knowledge about attitudes and preferences concerning financial solutions among women entrepreneurs in developing countries is very limited. Results from this study is therefore important, as it adds to previous understanding, especially as this particular group of entrepreneurs have the potential to play an important role in the development of their regions.

The aim of the paper is to analyze quantitatively and qualitatively requirements of Russian micro‐ and small‐firms in financial sources, along with opportunities and restrictions in the mobilization of investment at the different stages of a firm's life cycle.

In this paper the determinants of the propensity to invest and the supply of funding are investigated by using the Global Entrepreneurship Monitor (GEM) data set for Russia in the time period from 2006 to 2011.

The paper provides the analysis of Russian early entrepreneurs' and established business owners' decisions about the preferred structure of financial sources, comprising both statistical and logistic regression approaches for this investigation. The findings indicate that in Russia the structure of financial sources of start‐up entrepreneurs is predominated by “love capital” (mainly private and family savings), meanwhile, the percentage of business angels' financing is low in comparison with innovation‐driven countries. Moreover, there are merely extra‐economic factors, which influence informal investors' decision making on funding: personal relations with a borrower, an optimistic view on macroeconomic perspective and high status of an entrepreneur.

The findings in this paper suggest that this research can help the officials to formulate a program of SMEs' support at different stages of the financial chain in Russia.

In this paper the early and middle stages of a firm's life cycle are examined and some practical advice on a company's development and expansion are given.

The purpose of this paper is to identify and analyse the methods of housing finance adopted by the low income and informal groups in Nigeria.

A survey of 300 households in selected areas (low‐income/informal) of Jos Metropolis, Nigeria, was carried out, concerning the methods of housing finance used for building and home improvement.

The survey showed that 75 per cent of the households utilized traditional methods of financing and 25 per cent using modern methods.

Based on data collected from the survey, the research serves as a basis for further research into traditional methods of housing finance in developing countries.

The analysis of traditional financing methods highlights the range and structure of the traditional methods of financing in operation in informal and low income areas of Jos Metropolis, Nigeria. For example, informal and customary/traditional methods (Esusu/Asusu, Age grade association, Men's Revolving Loan Association, Social club contribution among others), of financing appear to be very effective housing finance methods.

The paper shows that In the absence of formal institutional financing methods, strengthening the community‐based social network through formalisation and empowerment for housing finance becomes vital.

It is argued that it is possible to utilise and formalise these traditional methods of housing finance, in order to enhance access to finance for housing development in low‐income urban areas in developing countries.

In this chapter we study internal and external, formal and informal, financing sources of Chinese firms during the period 1997–2006, by analyzing balance sheet data from the Chinese Industrial Surveys of Medium-sized and Large Firms for 2000–2006 and survey data from the Large-Scale Survey of Private Enterprises in China conducted in 1997, 2000, 2002, 2004, and 2006.

The following stylized facts emerge from our analysis: (1) State-owned firms continue to enjoy more generous external finances than other types of Chinese firms. (2) Chinese private firms have resorted to various ways of overcoming financial constraints, including reliance on the increasingly more mature informal financial markets, cost savings through lower inventory and other working capital requirements, and greater reliance on retained earnings. (3) Substantial variations exist in financial access among private firms, with small private firms facing more financial constraints whereas more established firms having financial access more equal to their SOE counterparts. (4) Although not as accessible as for SOEs, the Chinese formal financial sector does provide Chinese private firms with substantial financial resources, especially for their short-term needs during daily operations. (5) The most pressing financial constraint facing Chinese private firms is their limited ability to secure long-term funds to invest for growth, and resolving this issue should be one of the top goals of financial reforms in China.

The study explores how the intention to export affects financing and non-financing variables for small and medium-sized enterprises (SMEs) in a low-income country (LIC). The objectives of this study are (1) to discern between regional and global exporting and (2) to evaluate its policymaking implications.

Primary survey data were collected from 330 Rwandan SMEs and were analysed using ordered logistic models as an application of the expectation-maximisation iterating algorithm, which was tested for robustness using a sampling model variation.

The results show that alternative sources of finance are the predominant choice to finance the intention to export within and outside Africa. As the scope of export intentions broadened from regional to global, there was a shift in preferences from less formal to more formal lending technologies, moving from methods like factoring to lines of credit. Moreover, reliance on bank officers became more significant, with increasing marginal effects. Finally, the study determined that government financing schemes were not relevant for SMEs pursuing either regional or global exporting.

Whilst alternative sources of finance predominate the export intentions of Rwandan SMEs, establishing a robust banking relationship becomes crucial for global exporting. Despite this implication, the intention to export should prompt more transparent communication regarding government financial support programmes. There is an opportunity for increased usage of relationship lending to customise support for SMEs involved in exporting, benefiting both the private and public sectors.

This study accentuates how export distance alters SME financing priorities. The results also contribute to understanding how the value of relationship lending changes when less familiar markets (i.e. global exporting) are the objective. Moreover, the study offers a new perspective on how institutional voids affect entrepreneurial financing decisions in LICs.

The purpose of this paper is to test the effect of informal finance and trade credit on the performance of private firms.

Based on a survey to private firms in 19 cities, the paper empirically tests the promoting effects of informal finance and trade credit on the performance of private firms in China.

It was found that informal finance and trade credit have positive effects on private firms' performance measured by ROA. The net income reinvestment rate of private firms is positively related to whether or not the firm adopts informal financing or trade credit financing. A private firm having limited access to formal finance is more inclined to rely on self‐funds and is more limited by financing choices. Informal financing and trade credit can relieve the tension of cash flow chain but cannot solve the financing constraints. The empirical results also show that bank credit is still not the main financing choice for private firms and has not yet played a promoting role in private firms' performance and growth. Informal finance is more important to promote performance in manufacturing industry, while trade credit is more effective in wholesale and trading industry. The results show the coexistence viability of informal financing channels and formal financial institutions in China.

The policy implication is the Chinese Government should take careful steps to regulate informal financing sources.

After some theoretical literature, such as Lin and Sun, this paper explores for the first time the effect of informal financing channels on the performance of private firms.

Informal associations are typical features of farm and non-farm ventures especially within rural communities. Owing to the informality of these associations, members of the groups usually evolve strategies to cope with different kinds of economic and social shocks such as the COVID-19 pandemic or unexpected economic recessions. Accordingly, entrepreneurship and non-farm business development in rural areas require massive finance input, which this group largely lacks owing to agrarian activities which is the main source of revenue. Therefore, to inform rural development policies, this chapter draws on the interrelationships that exist between finance options (including formal, informal and social networks) and small business development. Using the World Bank Living Standards Measurement Survey – Integrated Surveys on Agriculture (LSMS-ISA), the analytics identifies informal financing and social networks as leading alternatives to formal financing option in rural businesses. Therefore, we suggest that the government institutions recognise and formalise informal finance systems. This will not only aid access to government interventions and programmes, but foster collaborations with existing formal institutions and investors for sustainable rural business financing.

The purpose of this paper is to investigate the determinants of financing preference of micro and small enterprises (MSEs) whilst distinguishing a broader range of financing sources beyond what is typically the case within the corporate finance literature.

Under the framework of ordinal logistic regression, the paper also tests whether there is evidence of hierarchical preference ordering as predicted by pecking order theory (POH) using field survey data for 2009.

The authors relate that new enterprises are more likely to prefer low cost and less risky or less formal financing such as internal or bootstrap finances. However, as the enterprise gets established or matures, its capacity to seek formal financing increases, thereby becoming more likely to prefer or being in a higher category of formal financing. While the paper affirms the POH, it is argued that this order is a consequence of severe persistent constraints other than sheer preference. The findings further reveal that, microentrepreneur's and MSE's‐specific level socio‐economic characteristics such as owner's education or financial literacy status, households tangible assets, ownership structure, enterprise size, as well as sensitivity to high interest rates in the credit market, to be important determinants of either past (start‐up), present or future financing preference.

The main value of this paper is to analyse the determinants of financing preference of MSEs within the context of rural financial market (RFM) from a developing country perspective.

This study has a dual purpose. The first is constructing a financial inclusion index to investigate if the reforms implemented during the last decades at the macroeconomic and sectoral levels have contributed to increase the financial inclusion level in Morocco. The second is to deepen the investigation to explore the impact of these reforms at the microeconomic level, by focusing on six major issues: determinants of financial inclusion, links between individual characteristics and barriers to financial inclusion, determinants of mobile banking use, motivations for saving, credit objectives and determinants of resorting to informal finance.

First, the principal component analysis methodology is mobilized to construct a financial inclusion index for Morocco. Second, the probit model methodology on a micro-level database of 5,110 Moroccan adults is used.

First, the financial inclusion index shows that financial inclusion in Morocco over the last two decades has followed different trends. The first period (1999–2004) was characterized by a slight upswing in the level of financial inclusion. In the second period (2004–2012), the level of financial inclusion increased significantly. During the third period (2012–2019), the financial inclusion maintained almost the same level. Second, empirical results showed that the determinants of formal finance and mobile banking are different from those of informal finance. Having a high educational attainment and being a participant in the labor market fosters financial inclusion. Concerning financial exclusion determinants, the results emphasized that a high educational attainment reduces the barriers leading to voluntary exclusion. As income level increases, barriers of involuntary exclusion such as “lack of money” become surmountable. Although "remoteness" and "high cost" are the major barriers to financial inclusion of all Moroccan social classes, the development of mobile banking allows to eliminate, smoothen and/or loosen all barriers sources of involuntary exclusion. As for the barriers causing voluntary exclusion, the Islamic finance model constitutes a lever for the inclusion of population segments excluded for religious reasons. As for the determinants of the recourse to informal finance, being a woman, an older person and having a low educational level (no more than secondary education) increase the probability to turn to informal finance.

The main limitation of this study is the non-availability of data on the two dimensions (quality and welfare) of financial inclusion. The composite index is constructed on the basis of two dimensions (access and use) for which data are available.

This study has three main implications. In practice, with the launching of the National Strategy for Financial Inclusion, this work provides empirical grounded evidence that contributes to design financial inclusion policies in Morocco. In research, while the debate on financial inclusion, mobile banking and informal finance has been raging in recent years, Morocco, like many other African countries, has not received coverage on these topics at the household level.

For society, this study provides considerable insight about the segments of population that are financially excluded and the main reasons for their exclusion.

This study enriches the existing literature with four essential contributions. First, it analyzes the evolution of the level of financial inclusion in the Moroccan economy through the development of a synthetic index. Second, it is the first to study the Moroccan population's financial behavior on the basis of micro-level data, which will help understand more precisely their financial behavior and the main obstacles to their inclusion. Third, this study explores the determinants of the use of mobile banking. Fourth, it sheds some light on the main determinants of the recourse to informal finance.