Undoubtedly, microenterprises play a critical role in the development of the economy.\nComprising a dominant share in the industry, microenterprises help to alleviate poverty\nand unemployment. However, the growth of microenterprises remains a global\nchallenge. A number of scholars have attributed the growth of microenterprises\nto accessibility of finance; however, microfinancing is equally significant in the\ninitiative of owners to expand. This study aims to examine how microfinancing\nmediates the effect of access to finance on the growth of microenterprises. A\nsurvey result from a dataset of 582 microenterprises from the Philippines was\nused for correlation, regression, and mediation analyses. The results suggest that\nthe impact of access to finance on the growth of microenterprises is heightened\nwhen microfinancing is maximized. However, the ownersâ?? preferences toward\ninternal financing limit the ability to expand. Thus, the issue of stagnation is a\nresult of the owners' isolation to external financing. The results highlight the\nneed for a more holistic approach to enterprise growth than merely facilitating\naccess to finance. The study recommends aspects such as literacy and competitiveness\nas factors other than access to capital as enablers of growth. The results may challenge\npolicymakers to enhance the existing policy frameworks further and provide more\nskills-enhanced income opportunities. Further, an experimental research using an\nintervention may help discover how to overcome stagnancy of micro and small firms.
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