Minority-owned small business enterprises play a significant role in the development of the U.S. economy by providing employment and contributing to its GDP. However, despite their contributions to the economy and labor markets, the problem is minority small business owners are denied credit more frequently than nonminority business owners. The purpose of this qualitative multi-case study was to understand how minority small business owners perceive the issues that make them more likely to be denied credit than nonminority applicants, and to evaluate their strategies. A theoretical framework of financial inclusion guided this study. Four research questions concerned the minority small business enterprises owners’ perspectives on the challenges and barriers they face when accessing credit, and their ideas on strategies that may serve their efforts to obtain alternative sources of credit. A purposive sampling was used to select 12 minority small business owners, who were over 18 and less than 65 years of age, resided in Pasquotank county and its surroundings counties, North Carolina, who had experience with applying for credit, and were in business for over 1 year. Each of the selected entrepreneurs volunteered to participate in an in-depth interview for about 45 minutes and an online questionnaire to discuss their experience with applying for credit. During the data analysis stage, 9 themes were identified. The most cited ones were: family and friends as significant sources of financing in the initial startups, insufficient business credit and collateral, and lack of financial preparedness in applying for loans. The participants asserted that they did not receive proper assistance in the loan application process. Recommendations for practice included minority acquisition of knowledge regarding loan application requirements for business. Future research could be focused on expanding the current study beyond rural areas and investigating the development of programs specifically focused on minority borrowers.
|Advisor:||O’Donnell, Tom, Roberts, Kenny|
|Commitee:||Scheg, Abigail, Bakari, Marie|
|Department:||School of Business and Technology Management|
|School Location:||United States -- California|
|Source:||DAI-A 81/6(E), Dissertation Abstracts International|
|Subjects:||Finance, Business administration|
|Keywords:||Asymmetric information, Credit rationing, Discrimination in financial markets, Financial exclusion, Financial inclusion, Minority-owned small business enterprises, North Carolina, Elizabeth City area region|
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