Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 366

Full Length Research Paper

Effects of credit constraints on the productivity of small and medium-sized enterprises in Cameroon

Serge Mandiefe Piabuo
  • Serge Mandiefe Piabuo
  • Ttreced-Cameroon, University of Yaoundé II and Biovesity International –Cameroon.
  • Google Scholar
Francis Menjo Baye
  • Francis Menjo Baye
  • Ttreced-Cameroon, University of Yaoundé II and Biovesity International –Cameroon.
  • Google Scholar
Juliuschupezi Tieguhong
  • Juliuschupezi Tieguhong
  • Ttreced-Cameroon, University of Yaoundé II and Biovesity International –Cameroon.
  • Google Scholar


  •  Received: 22 June 2015
  •  Accepted: 28 July 2015
  •  Published: 30 September 2015

Abstract

This paper assesses the determinants and effects of credit constraints on the productivity of small and medium-sized enterprises (SMEs) in Cameroon. Use is made of the Cameroon enterprise survey data collected by the World Bank in 2009 and an endogenous switching regression model. Results show that interest rates, size of enterprise, size of loan, size of collateral, maturity of loans and legal status of enterprises are major sources of credit constraints faced by SMEs. Results also indicate that medium enterprises are more credit constrained than small enterprises; meanwhile the effects of credit constraints affect small enterprises more than medium enterprises. Credit constrained firms have lower levels of productivity relative to unconstrained firms. These results have implications for the creation of credit bureaux, prudential stringency and rationalization of the Cameroon tax system.

 

Key words: Small and medium-sized enterprises, credit constraints, endogenous switching regression model, Cameroon tax system.