Israel, microfinance, credit, micro-businesses, market failure, entrepreneurship


Micro-businesses face various difficulties in obtaining credit. Our research focuses on the demand side for credit through questionnaires addressed to 101 micro- businesses owners in a peripheral region of Israel. We have identified the existence of a market failure: micro-businesses tend to suffer from a lack of information in regard to the existence of credit funds and in regard to loan taking procedures. Many of them are unaware of their need for credit or do not know how and whom to address. We also found that the micro-business population is quite heterogeneous and is in need of tailor-made credit solutions

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