Middle-class entrepreneurs in MENA countries: adapting to COVID-19 and access to finance

Abstract

Our article examines whether the strategies adopted by middle-class entrepreneurs during the pandemic affect their access to finance, particularly
from government programmes. These entrepreneurs are identified by their turnover: 2,278 small businesses in four MENA countries (Egypt,
Morocco, Tunisia and Jordan) were selected from the Economic Research Forum business surveys (February 2020-June 2021). Two probit regressions,
univariate and bivariate, estimate the demand for and supply of government finance respectively. Our results imply that trade credits and
business model adjustment through digital marketing and e-commerce put companies at a disadvantage when applying for government programmes
(demand side). However, the use of digital platforms, social media and specialist applications to maintain business activity without direct customer
contact is seen as an advantage for businesses to benefit from government support (supply side). Trade credit is seen as an alternative to bank loans,
and governments are encouraging the digitisation of businesses during the pandemic by approving funding applications.