The impacts on informal financing strategy of small and micro enterprises by interest rate risks and public health emergencies

Informal finance is a crucial financing method for small and micro enterprises (SMEs) in most developing countries. Interest rate risks (IRS) should be vital component of SMEs' informal strategies (IFS), public health emergencies (as COVID-19) likely to modify IFS due increased liquidity SMEs. This article examines the relationship between IRS its moderated effects by COVID-19. The study develops structural equation model investigate IFS, causal mediator corporate financial status regional economic conditions, moderating variables. empirical data from Wenzhou, China, distributed 2016 2021. concludes that will continue technique Chinese SMEs, even if it may have deterrent effect Additionally, there strong positive association IRS, as well moderator effects. Recommendations government policy include clarifying connection influencing variables, providing scientific methodical analysis tools evaluating factors impacting encouraging optimization upgrading IFS.