Microfinancing and formalization of SMEs in a crisis context: theoretical foundations and a proposal for an integrated crisis management model

Abstract

This article develops and tests an integrated model explaining the mechanisms through which microfinance and crisis management practices contribute to the formalization, performance, and long-term sustainability of small and medium-sized enterprises (SMEs) during periods of turbulence, with organizational resilience serving as a central mediating mechanism. Grounded in a positivist paradigm and a hypothetico-deductive approach, the study conceptualizes microfinance as a higher-order composite construct comprising eight contractual dimensions, including loan-rescheduling arrangements tailored to crisis conditions. The model also incorporates crisis management practices, organizational resilience, and two sequential endogenous constructs: SME formalization and crisis-related performance and sustainability. Ten hypotheses are tested using data collected from a sample of 300 Moroccan SMEs that had experienced at least one major disruption, including the COVID-19 pandemic, inflationary pressures, or a sector-specific shock. The analysis follows a triangulated methodological strategy combining SPSS v.26, partial least squares structural equation modelling using SmartPLS 4.0, and robustness testing through logistic regression in Stata 17. The findings support eight of the ten hypotheses. Specifically, the results indicate that the effect of microfinance on SME performance during crises is not direct but operates through organizational resilience, whereas the business sector does not significantly moderate the resilience–performance relationship. The model demonstrates satisfactory explanatory power for organizational resilience (R² = 0.547), formalization (R² = 0.563), and crisis-related performance and sustainability (R² = 0.498). These findings show that access to finance alone is insufficient to ensure SME continuity, its contribution depends on its conversion into organizational capabilities for anticipation, adaptation, and resource reconfiguration. The study extends the literature by clarifying the sequential mechanisms linking microfinance, organizational resilience, formalization, and performance, while providing practical implications for microfinance institutions and public policies designed to support SMEs during periods of crisis.