ACCESS TO FINANCE AND CREDIT UTILIZATION AMONG LEBANESE ENTERPRISES: Evidence from the World Bank Enterprise Survey 2013–2019
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Access to finance is a central issue in corporate finance because external funding can affect a firm's ability to maintain liquidity, finance investment, and pursue growth opportunities. This study examines the evolution of financial access among Lebanese enterprises using the World Bank Enterprise Survey for 2013 and 2019. The analysis focuses on four indicators: whether an establishment had a line of credit or loan from a financial institution, whether it applied for new credit during the last fiscal year, the outcome of recent credit applications, and the degree to which access to finance was perceived as an obstacle to operations. The empirical analysis uses published firm-level survey distributions and two-proportion z-tests for the comparable 2013 and 2019 indicators. The results show that the share of surveyed establishments with a current line of credit or loan declined from 57.0% in 2013 to 36.5% in 2019, while the share applying for new loans or lines of credit declined from 32.6% to 19.5%. Among 2019 applicants, 81.7% of applications were approved in full, 2.9% were approved in part, 10.6% were rejected, and 1.9% were withdrawn, with 2.9% still in process. At the same time, the proportion identifying access to finance as a major or very severe obstacle was broadly similar across the two survey rounds: 38.7% in 2013 versus 40.6% in 2019. The statistical comparisons indicate significant declines in current credit availability and loan application activity, while the change in the major-or-very-severe obstacle measure is not statistically significant. The findings describe important changes in financing conditions but do not establish a causal effect of credit access on firm performance. The study highlights the importance of financing availability, credit-market participation, and the distinction between credit demand and perceived financing constraints in evaluating the financial situation of enterprises.
Keywords
Access To Finance, Corporate Finance, Credit, Enterprise Surveys, Financial Constraints, Lebanon, Smes