Participatory Banks as an Alternative Source of SME Financing in Morocco: Evidence from Two-Group Discriminant Analysis

Abstract

Abstract:

The aim of this paper is to examine the alternative role that participatory banks can play in financing SMEs in Morocco, by adopting the two groups discriminant analysis. Specifically, the goal is to explain the choice of participatory banks as a new alternative for SME financing, based on key factors derived from financial theories adapted to the specificities of SMEs.

To carry out this study, we adopted a quantitative approach through a field survey (questionnaire) conducted among 171 SMEs, distributed between the two regions of Casablanca-Settat, and Rabat-Salé-Kenitra.

The results confirm that the majority of SMEs (79%) believe that the establishment of participatory banks in Morocco is a new alternative for financing SMEs, and that the cost of financing and the compliance of products with Sharia law are the most discriminating factors.

Keywords: Financial Theories, Participatory Banks, SME Financing, Two-group Discriminant Analysis.