Working Paper Series: Special Edition of 2016 to 2018 Interns

found to be not significantly associated with the odds of accessing credit. In addition, the variables larger technical, innovation, development and growth were found to have no significant impact on a firms’ likelihood of accessing credit. On the country level, it was observed that the log of GDP per-capita significantly reduces the odds of obtaining a loan, while the real interest rate has no significant impact on firms’ chances of obtaining credit. On the demand side, small and medium firms are significantly associated with the demand for credit and are both 42 per cent more likely to be discouraged relative to larger firms. The odds of foreign owned firms applying for credit is less than one 1per cent even though its significant, this was also observed for the variable duration of loan. This suggests that foreign owned firms have less need for credit in domestic markets. Also for the duration of a loan, if maturity dates cause the installments on loans to rise in the short-run, firms will be unwilling to refinance or seek additionally facilities and will pursue alternative sources of financing or reduce demand for credit altogether. The categories of managers’ education; university & postgraduate, technical & vocational, and variables; collateral, audited financial statements, innovation and development are found to significantly impact on the demand for credit. University & postgraduate are 19 per cent, technical & vocational are 44 per cent, innovative firms are 49 per cent, product development firms are 14 per cent, firms with collateral are 15.7 per cent and firms with audited financial statements are 6.8 per cent are all less likely to demand credit. The variables technical, exporter, growth as well as sole proprietors and partnership firms were not significantly associated with the likelihood of demand for credit. What this suggests is that exporters make more use of trade credit and other export guarantee schemes available thus reducing the need for credit. For those firms experiencing growth in sales, they are more likely to use retained earnings to finance investment decisions. Both country variables as measured by the log of GDP per-capita and real interest rate were found to significantly reduce the probability of firms applying for credit. This is consistent with studies by Cole & Dietrich (2014) who found that the need for credit was found to be negatively associated

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