NAVIGATING FINANCIAL TIDES: ETHNIC-MINORITY ENTREPRENEURS IN IRELAND'S ECONOMIC RECOVERY"
Abstract
This paper investigates the sources of finance for ethnic-minority small and medium-sized enterprises (SMEs) in post-crisis Ireland, considering the crucial role of the SME sector in the country's economic growth and sustainability. Against the backdrop of the Global Financial Crisis (GFC) aftermath, which significantly disrupted bank lending in Ireland, the study addresses the challenges faced by SMEs, with a specific focus on ethnicminority entrepreneurs. The economic landscape shaped by the GFC in Ireland witnessed a severe disruption in bank lending, leading to a notable reluctance among Irish businesses to seek credit. Holton and McCann (2012) observed that businesses refrained from applying for credit due to the prevailing belief that such applications would be rejected. Ireland's loan/overdraft rejection rate stood as the second highest in Europe during this period. Additionally, Irish firms faced stringent terms and conditions for bank financing, making it one of the tightest environments in the Euro area. The impact of the GFC on the volume of credit extended to the Irish SME sector was profound, with a dramatic negative effect noted by Holton et al. (2014). The Irish Small and Medium Enterprises Association (ISME) reported a 32 per cent reduction in demand for bank credit, coupled with a persistent high refusal rate of 52 per cent for credit applications by SMEs between March and May 2014. While lending conditions have improved since the GFC, SMEs, including those led by ethnic-minority entrepreneurs, continue to face challenges in securing credit. Banks, adapting to the new financial landscape, have modified their approach by offering performance-dependant short-term and/or restricted credit to SMEs. This serves as a gateway to accessing more substantial, longer-term funding opportunities (Trethowan, 2014b). This study contributes to understanding the unique financing dynamics experienced by ethnic-minority SMEs in post-crisis Ireland, shedding light on the evolving financial landscape and the persistent challenges faced by businesses seeking credit in the aftermath of the GFC.
Keywords:
Ethnic-minority SMEs, Financing Challenges, Global Financial Crisis, Bank Lending, Economic, SustainabilityDownloads
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https://doi.org/10.5281/zenodo.10534850%20Issue
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Copyright (c) 2024 Antoinette Mary Flynn , Brendan Joseph O'Sullivan
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