Microcredit and Micro and Small Enterprise Development – Small Farmers and Business Bank
This paper is giving an analysis of the Small Farmers and Business Bank, Ltd. (SFBB) of Belize, Central America. This program had been established for the promotion of micro and small enterprise (MSE) development and the major objective of this program was to make those MSEs a significant cog in national development plus in the alleviation of poverty.
This study by Pisani and Yoskowitz (2004) qualitatively investigates the SFBB and examines if the availability of microcredit allows for micro and small enterprises in becoming the channel through which there can be economic competitiveness, job creation, community rebuilding, and economic self-sufficiency. For this purpose, the authors conducted in-depth semi-structured interviews with fifteen current business borrowers.
The Theoretical Aspect of the Article
The article explains how the SFBB program works. Loans are made available to small and genuine businesses, entrepreneurs, and farmers to enable them to expand and profit. The borrowers are required to initiate the borrowing process by approaching the authorities and filling out relevant forms and submitting the required documents. Other than the working of the program, the article tells about the way research was conducted. Interviews were conducted with fifteen borrowers having diverse backgrounds and success rates. The demographics of the borrowers were recorded and so were the other details.
Two borrowers were highlighted in the article and their businesses were discussed. At the end of the article is a discussion of the program and what it does and does not do. It has also been compared to other institutions such as the Grameen Bank. The writers say that from the literature the deduction made is that there is a requirement of financing on the part of the MSE entrepreneurs rather than subsidized credit.
Analysis of the Literature Review
The literature review given is quite sound. Several articles have been referred to and they can be considered relevant.
For instance, the authors refer to the literature by Bornstein (1997) relating that the Grameen Bank in Bangladesh had been a success. Pisani and Yoskowitz (2004) refer to rich literature regarding the subject at hand and support their viewpoints and facts with the earlier publications. They have studied the issues and researched the studies made prior to their own. They did this in order that they find some literature that they can relate to and which may prove to be support for their own study.
For the research, Pisani and Yoskowitz (2004) used a qualitative type. They used the method of semi-structured interviews. They selected a convenience sample of fifteen borrowers from the SFBB who had agreed to participate in the research. They were screened and then their interviews were taken. The researchers made sure to include people having different success rates and belonging to diverse workplaces. Here the qualitative research type was used since the authors attempted at finding out if the availability of microcredit allows for micro and small enterprises in becoming the channel through which there can be economic competitiveness, job creation, community rebuilding, and economic self-sufficiency.
For this purpose, they were required to investigate the issue qualitatively as they were looking for the why of the issue and not the how. Here, interviews were a relevant method for the research since through interviews the researcher is able to get accurate and personal answers and not just a general overview.
Gathering of the Data
Interviews were conducted for around forty-five minutes to an hour and the points were recorded. The demographics were noted down and all the details of the interviewees had been recorded.
All the results were tabulated and compared. After that, another table was created which contained the composite summary of those results. The authors went through the results and noticed the issues that were reflected in them. They made note of the trends that were to be seen among the interviewees. For instance, the majority (73.33%) of the participants mentioned there being a good and healthy competition while 33.33% said that a great deal of competition existed. 20% even said that there was hardly any competition there.
All such trends were gathered and a general conclusion was reached.
Comment on the Conclusion
Pisani and Yoskowitz (2004) concluded that SFBB cannot be said to be a classic microcredit institution. They have obtained this conclusion through the literature reviewed earlier. It had been mentioned that the SFBB does not come under such an institution or program that aims at eradicating poverty completely nor can it be called to be moving toward self-sufficiency. The authors have also come up with conclusions from the results that were recorded of the interview.
They realized that the people who had started off their own businesses through the help of SFBB were performing well and were better off than the ones who had salaried jobs. The statistics from the results correlate with the evaluations made.
Michael J. Pisani; David W. Yoskowitz
The authors have clearly mentioned the aims of their research on the third page of their article. They write that “This present study seeks a qualitative look at the SFBB, and, in particular, whether access to microcredit enables micro and small enterprises to become catalysts for economic competitiveness, job creation, community rebuilding, and economic self-sufficiency.”
This explicitly defines what they intend to do in the study.
The authors have used relevant literature for supporting their views. However, there is some slight room for improvement and the authors could have referred to the literature regarding whether any availability of microcredit allows for the micro and small enterprises in leading to competitiveness and self-sufficiency. This issue has not been touched on in the literature review. Rather, the authors have given statistics regarding the SFBB.
Research Method Employed
The research method used was qualitative research which was appropriate here since the research needed to find out the how of the aim rather than the why.
Data Collection Technique Employed
Business interviews conducted for this research may be said to be justified since the authors attempted qualitative research. However, only fifteen participants were included in the research which may not have covered a vast viewpoint
Presentation of Results
All the results were tabulated and presented neatly which must have made it easier for anyone to interpret them.
The Link between Literature Review and Results
Not much literature review had been given so we cannot give a proper ranking to this heading. However, one area which coincided was that there was a higher number of male borrowers as compared to the females.
The paper offers an appropriate conclusion following the research results and the authors have assessed the situation well.
MA McPherson; JJ Rous
The authors have clearly indicated the aims of their research paper even in the abstract.
They write that “this research examines the common assumption that access to credit from formal financial institutions is an important determinant of growth at the firm level.”
McPherson and Rous have referred to several authors in their literature review. They have gone through relevant literature and critically analyzed it. Every fact and viewpoint has been supported by the other journal articles.
Research Method Employed
The research method used had been qualitative.
Data Collection Technique Employed
The survey was conducted of 858 small businesses in East Java for collecting the required data. A large number of participants had been included which must have allowed for an accurate and more widespread result.
Presentation of Results
The results obtained were tabulated. Regression was performed and the processed data was properly assembled. The tables were able to give a proper summary of the results.
The link between Literature Review and Results
Literature review talks of different researches conducted previously and several have positive results while there are also some having negative.
Here, there is a link between the results of the present research and the latter.
It was concluded that access to credit is not an important determining factor of small firm growth and rather, there are other features of companies that may lead to progress.
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