The Role of Entrepreneurial Motivation and Repayment Performance on Microcredit Terms

The chapter delves into the crucial role of entrepreneurial motivation and repayment performance on microcredit terms, particularly in the context of less developed countries. It highlights the challenges faced by entrepreneurs in accessing traditional bank lending due to information asymmetries and high transaction costs. The rise of microcredit programs, initially pioneered in developing countries, is examined as a solution to these issues. The study focuses on the pro-social orientation of microcredit, analyzing how entrepreneurs motivated by necessity and opportunity differ in their credit terms and repayment performance. By filling an empirical gap in the European context, this research provides valuable insights into the effectiveness of microcredit programs in promoting social and financial inclusion.