ENABLERS OF BANK CREDIT FLOW TO AGRO-PROCESSING SMEs:  THE ROLE OF BANK CREDIT TRANSPARENCY IN TANZANIA

Justus Mwemezi; Abdelhak Senadjki; Lau Lin Sea

doi:10.51200/mjbe.v10i1.4543

Authors

Justus Mwemezi
Abdelhak Senadjki
Lau Lin Sea

DOI:

https://doi.org/10.51200/mjbe.v10i1.4543

Keywords:

bank credit transparency, financial intermediation theory, agro-processing SMEs, loan process, credit risk management

Abstract

This research aimed to determine how bank credit transparency increases the flow of loans by mediating the relationship between credit risk management and credit flow to agro-processing SMEs. Since previous studies favored demand-side transparency, this study aims to fill the research gap by investigating the supply side. Information was gathered using the survey method. 397 Tanzanian bank branches were approached and asked to complete the questionnaire. Partial least square structural equation modeling (PLS-SEM) was applied to analyze the data. The empirical data revealed that information asymmetry and credit risk management negatively influence bank loan flow. Institutional lending structures had a significantly positive effect on bank credit flow. Policymakers and practitioners can use the findings of this study to improve bank credit transparency to borrowers and for the sustainability of agro-processing SMEs.

Author Biographies

Justus Mwemezi

Department of Finance,
Universiti Tunku Abdul Rahman,
31900 Kampar, Perak, Malaysia

Abdelhak Senadjki

Department of Economics,
Universiti Tunku Abdul Rahman,
31900 Kampar, Perak, Malaysia

Lau Lin Sea

Faculty of Business and Finance,
Universiti Tunku Abdul Rahman,
31900 Kampar, Perak, Malaysia

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