The Determinants of SME Credit Rationing in Morocco. Case of SMEs in the Casablanca Settat Region
Abstract
In this article, we are concerned with a central element of the Moroccan economy, namely small and medium-sized enterprises (SMEs), which often find themselves in a situation where alternative sources of financing are not easily accessible, including bank financing. Indeed, Moroccan SMEs are closely dependent on banking institutions to obtain the financial support necessary for their projects. However, these businesses frequently face the phenomenon of credit rationing, necessitating improved access to credit. In this research work, we have contributed to the study of this phenomenon, focusing specifically on the Casablanca Settat region. Our research revolves around two essential objectives. Firstly, we aimed to evaluate the impact of credit rationing on SMEs in this region. Next, we focused on empirically identifying the determinants of this phenomenon. To achieve these objectives, we selected a target population of 218 SMEs from the Casablanca Settat region. Our initial statistical tests revealed that SMEs in the Casablanca-Settat region are facing both total credit rationing and partial credit rationing.
Subsequently, the results obtained from multinomial logistic regression tests reveal that the SME's sector of activity, age, reputation, legal status, size, gender of its manager, age, education, nature of the relationship with the bank, and professional experience all play an important role in explaining this phenomenon.
References
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[25] Haj Khlifa, S. (2016). Balois System and Access of SMEs to Group Bank Financing.Doctoral thesis, Higher Institute of Commerce and Business Administration ISCAE Morocco.
[26] Hattou, M.F. (2016). Les déterminants d'accès au financement bancaire pour les PME: le cas de l'Afrique de l'est. Mémoire. Trois-Rivières, Université du Québec à Trois-Rivières, 100 p.
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[28] Jappelli, T., and Pagano, M. (2005). Role and Effects of Credit Information Sharing. Center for Studies in Economics and Finance Working Paper, No. 136.
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[30] Jiménez-Rico, A., Gómez-López, C.S., and Zamilpa, J. (2023). Determinants of Access to Bank Financing in SMEs in Mexico. Journal of Risk and Financial Management, 16: 477. DOI:https://doi.org/10.3390/jrfm16110477
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[32] Leland, H. and Pyle, D. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation. The Journal of Finance, 32(2): 371-387.DOI: http://dx.doi.org/10.2307/2326770
[33] Levenson, A.R., & Willard, K.L. (2000). Do Firms Get the Financing They Want? Measuring Credit Rationing Experienced by Small Business in the U.S. Small Business Economics, 14(2): 83-94.
[34] Lobez, F., and Vilanova, L. (2006). Microéconomie bancaire, collection finance, Eyrolles.
[35] Myers, S.C. (1984). The Capital Structure Puzzle. The Journal of Finance. No. 3. DOI: https://DOI 10.3386/w1393
[36] Narayanan, M.P. (1988). Debt versus Equity under Asymmetric Information. Journal of Financial and Quantitative Analysis, 23(1): 39-51. DOI: https://doi.org/10.2307/2331023
[37] Nizaeva, M., and Coskun., A. (2019). Investigating the relationship between financial constraint and growth of SMEs in South Eastern Europe. SAGE Open, 9: 1–15. DOI: https://doi.org/10.1177/2158244019876269
[38] Paranque, P. (1998). Financial Structure of French Industrial Companies: An Approach in Terms of Financing Convention.Bulletin of the Bank of France - No. 57
[39] Perry, C., and Pendleton, W. (1983). Successful Small Business Management. Sydney: Pitman Publishing.
[40] Phung, T. (2009). The Rationing of Credit for SMEs in the Case of Vietnam.Doctoral Thesis, University of Montpellier 1.
[41] Psillaki, M. (1995). Rationnement du crédit et PME: Une tentative de mise en relation. Revue internationale des PME, 8(34): 58-66. DOI: https://DOI:10.7202/1008359ar
[42] Quamar, T. (2008). The banking financing of SMEs under prudential regulation, Bâle II: The Case of Moroccan SMEs. Doctoral thesis, University of Montpellier.
[43] Rao, P., and Kumar, K. (2018). Reflection of owner’s attributes in financing decisions of SMEs. Small Enterprise Research, 25: 52–68. DOI: https://doi.org/10.1080/13215906.2018.1428908
[44] Roger, P. (1988). Théorie des marchés efficients et asymétrie d’information: une revue de la littérature. Finance, 9(1): 57-98.
[45] Rutherford, M., and Oswald, S (2000). Antecedents of Small Business Performance. New England Journal of Entrepreneurship, 3(2). Article 3. DOI: https://doi.org/10.1108/NEJE-03-02-2000-B002
[46] Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3): 355-374. DOI:https://doi.org/10.2307/1882010
[47] Stephen, A. Ross (1977). The Determination of Financial Structure: The Incentive-Signaling Approach. The Bell Journal of Economics, 8(1): 23-40. DOI: https://doi.org/10.2307/3003485
[48] Stiglitz, J. E. (1986). The General Theory of Tax Avoidance.NBER Working Papers 1868, National Bureau of Economic Research, Inc.
[49] Stiglitz, J., and Weiss, A. (1981). Credit Rationing in Markets with Imperfect Information. The American Economic Review, 71(3): 393-410.
[50] St-Pierre, J., & Bahri, M. (2011). the determinants of risk premium: the case of bank lines of credit granted to smes. Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., 16(04): 459-476. DOI: https://DOI: 10.1142/S108494671100194X
[51] Tijari, K. and Smouni, R. (2022). Entrepreneuriat féminin au Maroc: Freins et barrières spécifiques à l’engagement entrepreneurial des femmes. Revue Internationale des Sciences de Gestion, 5, 2 (May 2022).
[52] Van der Wijst, D. (1989). Financial Structure in Small Business. Theory, Tests and Applications. Lecture Notes in Economics and Mathematical Systems, 320, Springer-Verlag, New York. DOI:http://dx.doi.org/10.1007/978-3-642-45656-5
[2] Altman, E. I. (1983). Why businesses fail. Journal of Business Strategy, 3(4): 15-21. DOI:https://doi.org/10.1108/eb038985
[3] Amrhar, A. (2019). Contribution to the Study of Credit Rationing for Businesses in the Souss Massa Region. Doctoral thesis, ENCG Agadir.
[4] Andrieu, G., Raffaele, S., Van Der Zwan, P. (2018). Bank debt and trade credit for SMEs in Europe: Firm, industry, and country-level determinants. Small Business Economics, 51. DOI:10.1007/s11187-017-9926-y
[5] Argenti, J. (1976). Corporate Collapse: The Causes and Symptoms. Holsted Press, McGraw-Hill, London.
[6] Baker, H., Kumar, S., Rao, P. (2020). Financing preferences and practices of Indian SMEs.Global Finance Journal, Elsevier, vol. 43(C). DOI: 10.1016/j.gfj.2017.10.003
[7] Baldwin, J., et al. (1997). Failing Concerns: Business Bankruptcy in Canada. Minister of Industry, Ottawa, Canada
[8] Bellemare, M. (2000). An empirical assessment of credit constraints in urban Morocco. An application of various discrete choice models to the case of micro-enterprises in Casablanca. Progress report to the Econometrics Workshop.
[9] Berger, A., and Udell G. (2002). Small Business Credit Availability and Relationship Lending: The Importance of Bank Organizational Structure. The Economic Journal, Vol. 112: 32-53.
[10] Berger, A., and Udell, G. (1995). Relationship Lending and Lines of Credit in Small Firm Finance. The Journal of Business, 68(3): 351-81. DOI: http://dx.doi.org/10.1086/296668
[11] Bester, H. (1987). The Role of Collateral in Credit Markets with Imperfect Information. European Economic Review, 31 887-889. DOI: http://dx.doi.org/10.1016/0014-2921(87)90005-5
[12] Binks, M. and Ennew, C. (1996). The Impact of Service Quality and Service Characteristics on Customer Retention: Small Business and Their Banks in The UK. British Journal of Management, 7: 219-230. DOI:http://dx.doi.org/10.1111/j.1467-8551.1996.tb00116.x
[13] Binks, M., and Ennew, T. (1997). The Relationship between U.K. Banks and Their Small Business Customers. Small Business Economics, 9(2): 167-178.
[14] Binks, M.R., Ennew, C.T. and Reed, G.V. (1992).Information Asymmetries and the Provision of Finance to Small Firms. International Small Business Journal, 11(1): 35.DOI:https://doi.org/10.1177/026624269201100103
[15] Briozzo, A., and Vigier, H. (2014). The role of personal loans in the financing of SMEs. Academia Revista Latinoamericana de Administración, 27: 209–25.DOI: https://DOI 10.1108/ARLA-10-2013-0167
[16] Bruns, V., and Fletcher, M. (2008). Banks’ Risk Assessment of Swedish SMEs. Venture Capital, 10, 171-194. DOI: https://doi.org/10.1080/13691060801946089
[17] Buttner, E. and Rosen, B. (1988). Bank Loan Officers Perceptions of the Characteristics of Men, Women, and Successful Entrepreneurs. Journal of Business Venturing, 3: 249-258. DOI: https://doi.org/10.1016/0883-9026(88)90018-3
[18] Chaudhuri, K., Subash S., and Rajesh, N.R. (2020). Gender, small firm ownership, and credit access: Some insights from India. Small Business Economics 54: 1165–81. DOI: https://DOI:10.1007/s11187-018-0124-3
[19] Cressy, R., and Olofsson, C. (1997). The financial conditions for Swedish SMEs: Survey and research agenda. Small Business Economics, 9: 179–92. DOI: https://doi.org/10.1023/A:1007975924164
[20] Daoui, D., and HajKhlifa (2013). Basel II: What Impact on the Inclusion of Moroccan Banks in a Sustainable Development Approach? CIGI 2013.
[21] Dietsch, M., and Mahieux, X (2014). Comprendre le déficit de financement des PME pour stimuler leur croissance. Revue d'économie financière, Association d'économie financière, 0(2): 17-30.
[22] Dwight M. Jaffee and Russell, T. (1976). Imperfect Information, Uncertainty, and Credit Rationing. The Quarterly Journal of Economics, President and Fellows of Harvard College, 90(4): 651-666. DOI:https://doi.org/10.2307/1885327
[23] Flannery, M.J. (1986). Asymmetric Information and Risky Debt Maturity Choice. The Journal of Finance, 41: 19-37. DOI: https://doi.org/10.1111/j.1540 6261.1986.tb04489.x
[24] Guercio, M., Briozzo, A.E., Vigier, P.H., and Martinez, L.B. (2020). The financial structure of Technology-Based Firms. Revista Contabilidade & Finanças, 31: 444–57. DOI: https://DOI 10.1590/1808-057x201909580
[25] Haj Khlifa, S. (2016). Balois System and Access of SMEs to Group Bank Financing.Doctoral thesis, Higher Institute of Commerce and Business Administration ISCAE Morocco.
[26] Hattou, M.F. (2016). Les déterminants d'accès au financement bancaire pour les PME: le cas de l'Afrique de l'est. Mémoire. Trois-Rivières, Université du Québec à Trois-Rivières, 100 p.
[27] Jaffee, D., and Stiglitz, J. (1990). Credit Rationing. In B. Friedman, & F. Hahn (Eds.), Handbook of Monetary Economics (Vol. 2, pp. 837-888). Elsevier.
[28] Jappelli, T., and Pagano, M. (2005). Role and Effects of Credit Information Sharing. Center for Studies in Economics and Finance Working Paper, No. 136.
[29] Jensen, Michael C. and Meckling, William H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4): 305-360/
[30] Jiménez-Rico, A., Gómez-López, C.S., and Zamilpa, J. (2023). Determinants of Access to Bank Financing in SMEs in Mexico. Journal of Risk and Financial Management, 16: 477. DOI:https://doi.org/10.3390/jrfm16110477
[31] Keeton, W. (1979) Equilibrium Credit Rationing. Garland Press, New York. DOI:https://doi.org/10.4324/9781315207223
[32] Leland, H. and Pyle, D. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation. The Journal of Finance, 32(2): 371-387.DOI: http://dx.doi.org/10.2307/2326770
[33] Levenson, A.R., & Willard, K.L. (2000). Do Firms Get the Financing They Want? Measuring Credit Rationing Experienced by Small Business in the U.S. Small Business Economics, 14(2): 83-94.
[34] Lobez, F., and Vilanova, L. (2006). Microéconomie bancaire, collection finance, Eyrolles.
[35] Myers, S.C. (1984). The Capital Structure Puzzle. The Journal of Finance. No. 3. DOI: https://DOI 10.3386/w1393
[36] Narayanan, M.P. (1988). Debt versus Equity under Asymmetric Information. Journal of Financial and Quantitative Analysis, 23(1): 39-51. DOI: https://doi.org/10.2307/2331023
[37] Nizaeva, M., and Coskun., A. (2019). Investigating the relationship between financial constraint and growth of SMEs in South Eastern Europe. SAGE Open, 9: 1–15. DOI: https://doi.org/10.1177/2158244019876269
[38] Paranque, P. (1998). Financial Structure of French Industrial Companies: An Approach in Terms of Financing Convention.Bulletin of the Bank of France - No. 57
[39] Perry, C., and Pendleton, W. (1983). Successful Small Business Management. Sydney: Pitman Publishing.
[40] Phung, T. (2009). The Rationing of Credit for SMEs in the Case of Vietnam.Doctoral Thesis, University of Montpellier 1.
[41] Psillaki, M. (1995). Rationnement du crédit et PME: Une tentative de mise en relation. Revue internationale des PME, 8(34): 58-66. DOI: https://DOI:10.7202/1008359ar
[42] Quamar, T. (2008). The banking financing of SMEs under prudential regulation, Bâle II: The Case of Moroccan SMEs. Doctoral thesis, University of Montpellier.
[43] Rao, P., and Kumar, K. (2018). Reflection of owner’s attributes in financing decisions of SMEs. Small Enterprise Research, 25: 52–68. DOI: https://doi.org/10.1080/13215906.2018.1428908
[44] Roger, P. (1988). Théorie des marchés efficients et asymétrie d’information: une revue de la littérature. Finance, 9(1): 57-98.
[45] Rutherford, M., and Oswald, S (2000). Antecedents of Small Business Performance. New England Journal of Entrepreneurship, 3(2). Article 3. DOI: https://doi.org/10.1108/NEJE-03-02-2000-B002
[46] Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3): 355-374. DOI:https://doi.org/10.2307/1882010
[47] Stephen, A. Ross (1977). The Determination of Financial Structure: The Incentive-Signaling Approach. The Bell Journal of Economics, 8(1): 23-40. DOI: https://doi.org/10.2307/3003485
[48] Stiglitz, J. E. (1986). The General Theory of Tax Avoidance.NBER Working Papers 1868, National Bureau of Economic Research, Inc.
[49] Stiglitz, J., and Weiss, A. (1981). Credit Rationing in Markets with Imperfect Information. The American Economic Review, 71(3): 393-410.
[50] St-Pierre, J., & Bahri, M. (2011). the determinants of risk premium: the case of bank lines of credit granted to smes. Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., 16(04): 459-476. DOI: https://DOI: 10.1142/S108494671100194X
[51] Tijari, K. and Smouni, R. (2022). Entrepreneuriat féminin au Maroc: Freins et barrières spécifiques à l’engagement entrepreneurial des femmes. Revue Internationale des Sciences de Gestion, 5, 2 (May 2022).
[52] Van der Wijst, D. (1989). Financial Structure in Small Business. Theory, Tests and Applications. Lecture Notes in Economics and Mathematical Systems, 320, Springer-Verlag, New York. DOI:http://dx.doi.org/10.1007/978-3-642-45656-5
Published
2024-12-30
How to Cite
BOUTFSSI, Adil; QUAMAR, Tarik.
The Determinants of SME Credit Rationing in Morocco. Case of SMEs in the Casablanca Settat Region.
Theoretical and Practical Research in Economic Fields, [S.l.], v. 15, n. 4, p. 831 - 848, dec. 2024.
ISSN 2068-7710.
Available at: <https://journals.aserspublishing.eu/tpref/article/view/8677>. Date accessed: 06 jan. 2025.
doi: https://doi.org/10.14505/tpref.v15.4(32).04.
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