3627 Evaluating the creditworthiness of a viable artisanal small-scale mining operation
DOI:
https://doi.org/10.17159/Abstract
Small-scale miners who operate at the artisanal level in Nigeria struggle to attract formal sources of financing to upgrade their operation to a sustainable form of small-scale mining operation. It has been proven in the body of knowledge that for an investment to attract formal sources of financing, the business must be considered creditworthy by potential lenders. Again, for an investment to be regarded as creditworthy, the credit risks associated with the investment must be bearable for the potential lender. How then can a miner attract formal funding which will help them take the leap from artisanal state to a form of sustainable small-scale mining operation? This study evaluates the credit worthiness of ASM operators using key credit risk parameters identified in the literature and through primary investigation. A quantitative study is then conducted on a sample of 100 ASM establishments in Nigeria to evaluate the effect of these identified credit risk parameters on creditworthiness. It is shown in this study that being a member of a mining cooperative society, which is a form of social collateral, best improves the chances of access to formal financing for miners within the sample group. This underpins the role of social collateral, in both formal and informal economy, and its influence in improving the creditworthiness of a typical ASM operator.
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Copyright (c) 2025 Olushola Daniel Eniowo, Moshood Onifade, Hendrik GROBLER, Antoine Floribert Mulaba-Bafubiandi, Ojemeri Sunday Otuogbai
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