Micro-finance agencies and SMEs: model of explication of tacit knowledge

Abstract

This paper contributes to a new area of research, namely: institutional preparedness of economic development agencies for developing small and medium-sized enterprises (SMEs). The cases presented illustrate variations in the micro-finance lender agency-enterprise development of processes for sharing vision and interdependence. In clarifying the nature of the agency-enterprise relationship along these two dimensions, we develop a set of propositions. Our model contends: 1) that effective processes for sharing vision and good cooperation maximise the likelihood of explication of tacit knowledge; 2) that ineffective processes for sharing vision and good cooperation lead to ad hoc explication of tacit knowledge; 3) ineffective processes for sharing vision and poor cooperation minimise the likelihood of explication of tacit knowledge; 4) effective processes for sharing vision and poor cooperation maximise the likelihood of explication of tacit knowledge.