2.9 percentage points). _Assets and formal savings_ : A surprising finding is that farmers with more assets and with formal savings borrow more from informal lenders, which may reflect a particularity of the survey data. _Regional variations_ : Lastly, we find significant regional variations in access to informal loans. Farmers located in the more populated and more agrarian municipalities have better access to informal lenders. Informal lenders are more likely to grant loans to farmers located in the South & Southeast, Center, Center-west, and Northwest regions.

Microentrepreneurs receiving loans from formal lenders present the following characteristics. They are more likely to be male (significant at 12 percent), are middle-aged, sell outside the municipality (significant at 12 percent), work in manufacturing, have formal savings, have informal savings, register with government agencies (significant at 11 percent), and have younger operations. Microentrepreneurs located in the Center region have less access to formal loans whereas those located in the Center-west have more access.

Microentrepreneurs receiving loans from informal lenders are more likely to receive remittances, have experience as a salaried worker, are middle-age, have more education, have younger operations, do not have formal savings, have informal savings, made sales on credit, and bought inputs on credit. We find some regional differences. Microentrepreneurs located in the South and Southeast and Center-west regions have greater propensity to borrow from informal lenders as well as those residing in larger and more agrarian municipalities.

There are some surprising findings with respect to access to informal lenders. First, the results indicate that more educated microentrepreneurs and farmers with more assets are more likely to borrow from informal lenders. This is contrary to the prior belief that informal lenders serve “worse-off” individual entrepreneurs or smaller businesses. Another surprising finding is that access to formal lenders does not present regional variations for farmers.

# _Enterprises_

In this section, we concentrate the analysis on the partial derivates of the regressors on each of the three participation outcomes, pointing out differences between formal and informal markets. Table 6e and 6f report those partial derivatives evaluated at mean values of the explanatory values. Thus, the empirical results can be interpreted as those of the “average” enterprise. Below we discuss only variables that have significant coefficients, which is indicated by the p-values reported in brackets next to the partial derivates. We report estimations combining both agricultural and nonagricultural enterprises because the data contain the same explanatory variables. However, to account for unexplained differences across economic sector, we include two dummy variables to distinguish agricultural and manufacturing enterprises from enterprises in other economic sectors.

# <u>Who demands loans?</u>

Similar to the results for individual entrepreneurs, we find that indicators of business size or business age do not influence the demand for loans. This suggests that small and medium-size enterprises are not more likely to demand loans than large or micro ones or that younger enterprises demand more loans than older ones.

18