Information problems in lending to small-scale enterprises – evidence from Ecuador
Small-scale enterprises receive several forms of aid, but many are denied access to formal loans. This article presents findings of a study which considers the demand for and supply of funds, and the factors lenders use to ration credit in special microenterprise programmes. The article discusses ways to help imrove microentrepreneurs' access to finance. By helping entrepreneurs to collect, assemble and prepare the type of data needed to evaluate loans, microenterprise programmes will not only improve their own information problem and their loan screening process, but will also assist their clients to learn what will be required if they ever hope to become clients of commercial lenders.