The Ability of Banks to Lend to Informationally Opaque Small Businesses
Title | The Ability of Banks to Lend to Informationally Opaque Small Businesses PDF eBook |
Author | N. Allen Berger |
Publisher | World Bank Publications |
Pages | 52 |
Release | 1999 |
Genre | |
ISBN | 9080401536 |
August 2001 Large and foreign-owned institutions may have difficulty extending relationship loans to informationally opaque small firms. Bank distress does not appear to affect small business lending, although even small firms may react to bank distress by borrowing from multiple banks. Consolidation of the banking industry is shifting assets into larger institutions that often operate in many nations. Large international financial institutions are geared toward serving large wholesale customers. How does this affect the banking system's ability to lend to informationally opaque small businesses? Berger, Klapper, and Udell test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms, using a rich new data set on Argentinean banks, firms, and loans. They also test hypotheses about borrowing from a single bank versus borrowing from several banks. Their results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms, especially if small businesses are delinquent in repaying their loans. Bank distress resulting from lax prudential supervision and regulation appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, despite raising borrowing costs and destroying some of the benefits of exclusive lending relationships. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study small and medium size firm financing. The authors may be contacted at [email protected], [email protected], or [email protected].
The Ability of Banks to Lend to Informationally Opaque Small Businesses
Title | The Ability of Banks to Lend to Informationally Opaque Small Businesses PDF eBook |
Author | Allen N. Berger |
Publisher | |
Pages | 47 |
Release | 2004 |
Genre | |
ISBN |
Large and foreign-owned institutions may have difficulty extending relationship loans to informationally opaque small firms. Bank distress does not appear to affect small business lending, although even small firms may react to bank distress by borrowing from multiple banks.Consolidation of the banking industry is shifting assets into larger institutions that often operate in many nations. Large international financial institutions are geared toward serving large wholesale customers. How does this affect the banking system's ability to lend to informationally opaque small businesses?Berger, Klapper, and Udell test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms, using a rich new data set on Argentinean banks, firms, and loans. They also test hypotheses about borrowing from a single bank versus borrowing from several banks.Their results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms, especially if small businesses are delinquent in repaying their loans.Bank distress resulting from lax prudential supervision and regulation appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, despite raising borrowing costs and destroying some of the benefits of exclusive lending relationships.This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to study small and medium size firm financing. The authors may be contacted at [email protected], [email protected], or [email protected].
Ability of Banks to Lend to Informationally Opaque Small Businesses
Title | Ability of Banks to Lend to Informationally Opaque Small Businesses PDF eBook |
Author | N. Allen Berger |
Publisher | |
Pages | 0 |
Release | 1999 |
Genre | |
ISBN |
August 2001 Large and foreign-owned institutions may have difficulty extending relationship loans to informationally opaque small firms. Bank distress does not appear to affect small business lending, although even small firms may react to bank distress by borrowing from multiple banks. Consolidation of the banking industry is shifting assets into larger institutions that often operate in many nations. Large international financial institutions are geared toward serving large wholesale customers. How does this affect the banking system's ability to lend to informationally opaque small businesses? Berger, Klapper, and Udell test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms, using a rich new data set on Argentinean banks, firms, and loans. They also test hypotheses about borrowing from a single bank versus borrowing from several banks. Their results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms, especially if small businesses are delinquent in repaying their loans. Bank distress resulting from lax prudential supervision and regulation appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, despite raising borrowing costs and destroying some of the benefits of exclusive lending relationships. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study small and medium size firm financing. The authors may be contacted at [email protected], [email protected], or [email protected].
The Ability of Banks to Lend to Informationally Opaque Small Businesses
Title | The Ability of Banks to Lend to Informationally Opaque Small Businesses PDF eBook |
Author | Allen N. Berger |
Publisher | |
Pages | 0 |
Release | 2001 |
Genre | Bank loans |
ISBN |
The Oxford Handbook of Entrepreneurial Finance
Title | The Oxford Handbook of Entrepreneurial Finance PDF eBook |
Author | Douglas Cumming |
Publisher | OUP USA |
Pages | 937 |
Release | 2012-03-22 |
Genre | Business & Economics |
ISBN | 0195391241 |
Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.
Doing Business with Banks
Title | Doing Business with Banks PDF eBook |
Author | Gibson Heath |
Publisher | |
Pages | 108 |
Release | 1989 |
Genre | Bank loans |
ISBN | 9780962388101 |
Restoring Credit to Main Street
Title | Restoring Credit to Main Street PDF eBook |
Author | United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Economic Policy |
Publisher | |
Pages | 56 |
Release | 2010 |
Genre | Business & Economics |
ISBN |