Loading…
Quality of accounting information and SMEs’ financial performance: The mediating role of bank and informal financing
This study examines the relationship between the use of the quality of accounting information and the financial performance of small and medium-sized enterprises (SMEs), focusing on the underlying intermediary mechanism, namely access to bank and informal finance in the process. We processed data fr...
Saved in:
Published in: | Research in international business and finance 2025-03, Vol.75, p.102763, Article 102763 |
---|---|
Main Authors: | , , , , |
Format: | Article |
Language: | English |
Subjects: | |
Citations: | Items that this one cites |
Online Access: | Get full text |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Summary: | This study examines the relationship between the use of the quality of accounting information and the financial performance of small and medium-sized enterprises (SMEs), focusing on the underlying intermediary mechanism, namely access to bank and informal finance in the process. We processed data from 331 SMEs in the Democratic Republic of Congo (DRC) with a structural equation model and our results show that the quality of accounting information positively affects the financial performance of SMEs and access to bank financing; the results suggest informal financing positively affects the financial performance of SMEs and access to formal financing. We also find that using accounting information can lead SMEs to pay attention to informal finance, which negatively affects their overall financial performance. Our research contributes to understanding the critical role that informal finance plays in the performance of SMEs and their access to formal finance in DRC and similar financial environments in vastly underexplored African contexts where a thriving banking sector coexists with various informal financing alternatives.
[Display omitted]
•Interplay between the quality of accounting information, access to bank and informal finance, and the financial performance of SMEs in DRC is examined.•Financial inclusion through informal financing significantly improves the financial performance of SMEs.•Major impact of informal financing in access to bank money.•Critical role of quality of accounting information in the use of formal and informal financing and any influence on financial performance. |
---|---|
ISSN: | 0275-5319 |
DOI: | 10.1016/j.ribaf.2025.102763 |