DETERMINANTS OF THE DISCOURAGED BORROWERS IN TRANSITIONAL ECONOMIES

Accessing credit always appears to be crucial for firms' development. However, some businesses self-excluded them in the credit markets because of the fear of rejection. The problem is believed to be more severe in underdeveloped countries. With the aim of having a better understanding of the issue, the authors focus on learning potential determinants from firms' sides in various transition economies, which are always believed to create more obstacles in accessing credit. Using an initia l sample of 9,979 observations at firm-level database across 17 transitional economies, we uncover several influences of different elements from the firm's side in the case of being "discouraged borrowers." Through the regression results, interesting findings have emerged. Firms' financial conditions, perceptions, and social capital play a pivotal role in determining the problem. From that viewpoint, managerial implications are made to better support firms to improve their accessibility and lessen the probability of discouragement in the credit market.