Research Handbook on Entrepreneurial Finance

Research Handbook on Entrepreneurial Finance

Research Handbooks in Business and Management series

Edited by Javed Ghulam Hussain and Jonathan M. Scott

Drawing upon current cutting-edge theories, knowledge and research findings, this Handbook provides an analysis of the interaction between small and medium-sized enterprises (SMEs), entrepreneurs and financial institutions globally. The contributors consider regional and international perspectives within and between Europe, North America, New Zealand, the Middle East, as well as South, Central and East Asia on a chapter-by-chapter basis. In so doing, they provide a contextualized, up-to-date snapshot of research into entrepreneurial finance across the world.

Chapter 13: Unilateral microfinance? The commercial roots of entrepreneurial diversity

Madina Subalova, Haya Al-Dajani and Zografia Bika

Subjects: business and management, corporate governance, entrepreneurship, economics and finance, financial economics and regulation


Formal credit markets in developing countries are less advanced and therefore, obtaining external funding is difficult for entrepreneurs. As such, microfinance can be a viable alternative solution. This study demonstrates the diverse structure of the microfinance sector and the crucial role of commercial microfinance as a growth trigger in Kazakhstan. By drawing on data from six in-depth interviews with key microfinance industry informants and 155 structured interviews with entrepreneurial users of microfinance lending in Kazakhstan, we found that commercial and outreach microfinance organizations (MFOs) have differing capital structures and evaluation criteria and serve different types of entrepreneurs. Although commercial MFOs distance themselves from poor entrepreneurs, their role in supporting entrepreneurship is important as they provide ongoing funding access and, therefore, tackle entrepreneurs’ working capital dilemmas.

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