Determinants of credit access of small and medium enterprises in emerging economies: evidence from the World Bank enterprise surveys

Credit access has an important role for small and medium enterprises (SMEs) to finance their activities. The purpose of this paper is to investigate the importance of firm, sector and country characteristics in credit access of SMEs in emerging economies. Through data collected from the World Bank enterprise surveys, we study 107,652 observations from 139 countries over the period 2006-2018 and estimate a multilevel logit model, what allows the comparison, in terms of quality of the prediction, with a traditional credit logit model. The results show that country characteristics related to banking sector development and informational credit system are statistically significant. Additionally, informational characteristics of firms play an important role in the probability of having credit access by SMEs. This paper also fills an important methodological gap, since logit models that take into account a multilevel perspective are rarely explored in studies involving credit access of SMEs in emerging economies.