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Citation Information

Type Conference Paper - African Finance Workshop in South Africa
Title Credit participation and access in post-war economy: Evidence from small scale enterprises in Liberia
Publication (Day/Month/Year) 2012
Country/State South Africa
URL https://econrsa.org/system/files/workshops/papers/2012/dukuly-credit-participation.pdf
Small enterprises in post-war Liberia have huge potential of reversing negative consequences of
conflict and spurring economic growth, but they are trapped in financing difficulties. The
argument is reinforced that the credit market of Liberia is segmented and underdeveloped, with
high level of asymmetric information, which has implications for screening errors, credit market
participation and access. Suggestively, the development of credit market is critical to successful
credit intervention, because it determines the strength of regulatory system; prudential
guidelines; pricing of credit and ultimate ability of the small firms to participate in the credit
market. The paper focuses on post-war period, looking at credit market participation and access
in order to facilitate holistic integration of small enterprises in credit programs of Liberia. The
paper immensely inform financial policy and add to existing literature by providing support to
existing theories and presenting new evidence on the contextual nature of interaction between
small firms and credit market in post-war economy. Microeconometric models and firm level
micro data gathered from surveying of small-scale firms using the Liberia National Account of
the Establishment Survey is used to buttress discussion. The answerable research question is:
what factors influence credit market participation and access in a post-war economy? Credit
market participation and access to credit are associated with diversity of factors such as credit
market variables, skill/experience, firm size, performance indicators and market/institutional
environment that defines firm operations. Hence, easing collateral requirements, strengthening
prudential guidelines in regulatory systems, sensitizing borrowers, maintaining affordable and
growing entrepreneurial culture are critical in developing credit markets, thus relaxing financial

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