Characteristics of microcredit in the manufacturing industry of Pasto city, 2016

Abstract

For microenterprises, there are great difficulties to finance themselves given their poor credit quality, causing them to restrict traditional credit and, in turn, encouraging the use of informal sources of financing. However, microcredit is established as a financing alternative with enormous potential in regional economic development, since it encourages entrepreneurship and makes it possible to consolidate a business response to the needs of the least favored sectors, which undoubtedly impacts on poverty and, therefore, in development. The present article, aims to determine the characteristics of the microcredit and the level of satisfaction of its users, in the industrial manufacturing sector of Pasto. Therefore, the research has a quantitative approach, developing a type of descriptive study, which was based on a survey applied to 315 manufacturing microenterprises of the municipality of Pasto in 2016. The results show that 64.76% of manufacturing microenterprises accessed to the microcredit, evidencing the moderate presence of exclusion and financial self-exclusion in that business segment. Additionally, microcredit users revealed a low financial education due to their lack of knowledge about the characteristics of the service, like interest rate, fee, term, etc. Finally, it should be noted that, although microcredit users generally stated that the microcredit was appropriate, sufficient and easily accessible, perceive the service as expensive, however, the vast majority stated that they were satisfied with the service and 67% would be willing to continue making use of the microcredit.