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Connectedness and SME Financing in Post-Communist Economies: Evidence from Uzbekistan

Ruziev, Kobil; Midmore, Peter

Authors

Kobil Ruziev Kobil.Ruziev@uwe.ac.uk
AHOD in UG Accounting & Economics Prog Clus

Peter Midmore



Abstract

© 2015 Taylor & Francis. Abstract: This paper investigates effects of interpersonal links with bureaucrats on SME access to formal finance. A survey of 502 SMEs in post-communist Uzbekistan shows fewer SMEs with government connections express a need for external finance, but success rates of applications are higher than for SMEs without connections. Econometric models show government-connected SMEs receive more formal credit than their counterparts. The small share of SME credit available is thus distributed in favour of those capitalising on bureaucratic links, with consequent resource misallocation. Findings imply that greater SME credit flows need supplementing with capacity building that improves bank transparency and efficiency.

Journal Article Type Article
Publication Date Jan 1, 2015
Journal Journal of Development Studies
Print ISSN 0022-0388
Electronic ISSN 1743-9140
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 51
Issue 5
Pages 586-602
APA6 Citation Ruziev, K., & Midmore, P. (2015). Connectedness and SME Financing in Post-Communist Economies: Evidence from Uzbekistan. Journal of Development Studies, 51(5), 586-602. https://doi.org/10.1080/00220388.2014.989991
DOI https://doi.org/10.1080/00220388.2014.989991
Keywords interpersonal connections, social capital, formal finance, SME financing, transition economies, post-communist economies, Central Asia, Uzbekistan
Publisher URL http://dx.doi.org/10.1080/00220388.2014.989991
Additional Information Additional Information : This is an Accepted Manuscript of an article published by Taylor & Francis in the Journal of Development Studies on 16 June 2015, available online: http://wwww.tandfonline...80/00220388.2014.989991

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