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Factors influencing access to bank finance for agri-food SMEs in the Central African Republic: An empirical study of agri-food SMEs in Bangui and the surrounding area (Revue Française d'Economie et de Gestion)

Research paperRevue Française d'Economie et de GestionOctober 202624 pages36 min readEmmanuel Mbetid Bessane, Cedric de Saint Francois SEBIRO TEWARAOriginal source

Key number

50.9%

Bank credit access rate p.8

Largest segment

62.8%

Surveyed SMEs with collateral p.12

Key number

74.8%

Model classification accuracy p.14

Summary

The empirical study investigates the determinants of access to bank credit among 234 agri-food SMEs located in Bangui (140), Bimbo (54), and Bégoua (40) in the Central African Republic.p.8
Among the surveyed enterprises, 50.9% (119 SMEs) have access to bank credit, while 49.1% (115 SMEs) report having no access.p.8
A one-unit increase in firm size, measured by the logarithm of turnover, raises the relative odds of accessing bank credit by approximately 33.4% (p = 0.0171).p.13
Information asymmetry significantly hampers bank credit access, as a one-unit increase in the asymmetry score decreases the odds of obtaining credit by 36.9% (p < 0.001).p.13
The binary logistic regression model demonstrates global statistical significance (LR Chi² = 66.421, p < 0.001) with a McFadden pseudo-R² of 0.205 and a correct classification rate of 74.8%.p.14

Key insights

1. Collateral availability is the primary driver of bank credit approval, increasing the odds of securing credit by more than 10.5 times.p.13
2. High information asymmetry between borrowers and financial institutions significantly impedes bank financing for agri-food SMEs.p.13
3. Larger enterprise size positively influences bank financing probability due to higher turnover and more structured documentation.p.15
4. Merely holding tangible assets is insufficient for credit access if those assets cannot be effectively pledged as legally acceptable collateral.p.16
5. Standard financial health metrics such as profitability and liquidity do not meaningfully predict bank lending decisions under high information opacity.p.18
6. Firm age and frequency of credit requests do not provide any significant advantage in securing bank loans.p.19
7. Establishing public guarantee funds and risk-sharing mechanisms is essential to mitigate collateral shortages for Central African agri-food SMEs.p.22

Topics and entities

Banking Private debt and venture debt SME finance and lending Banque des États de l'Afrique Centrale Université de Bangui

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