Patterns of financing the micro-businesses A study on the Artisan Entrepreneur’s perceptions towards the different financing sources

Abstract

This thesis investigates the perceptions of artisan entrepreneurs in Algeria regarding various financing patterns and their influence on funding choices. Utilizing the Theory of Planned Behavior (TPB), the research analyzes how attitudes, subjective norms, and perceived behavioral control affect financial decisions, addressing a critical gap in understanding the financial landscape for artisan entrepreneurs. The empirical analysis employed multi-response logistic regression to test the hypotheses. Findings indicate that attitudes towards formal financial institutions, particularly banks, are generally negative due to mistrust and perceived barriers. In contrast, subjective norms— reflecting peer and social network influences—positively affect openness to diverse funding methods. Perceived behavioral control exhibited a complex relationship, with some entrepreneurs overcoming challenges through informal networks. A significant conclusion is the predominance of informal financing, such as personal savings and loans from family and friends, which often limits growth potential. The study emphasizes the need for policy interventions, including tailored financial products, financial literacy programs, and simplified access to government-backed loans. This research contributes to the literature on micro-entrepreneurship by providing actionable insights for improving access to financial resources, thereby enhancing the sustainability and growth of artisan entrepreneurs.