The impact of financial services and managerial Training on Costa Rica SMEs

This paper considers the impact that financial services other than credit, and short term training courses have on total sales, employee number, level of formalization and access to credit in the regular financial system for a group of micro, small and medium size enterprises that are clients of a micro financing entity operating in Costa Rica. With this aim, data collected over five years (2006 to 2010), and econometric models that monitor a company's performance by visible and non-visible attributes affecting measuring variables were used. Results show that the companies that received financial services other than the credit itself increased sales and employment more, and also improved their level of formalization (although the latter is statistically weak), when compared to others that did not had access to this type of financing. Also, it seems that participation and compliance guarantees are the most impacting financial instrument on company performance. On the other hand, no evidence was obtained about short training courses had any impact on company performance. Finally, some policy changes are recommended.