Bank Involvement with SMEs : Beyond Relationship Lending

de la Torre, Augusto; Martínez Pería, María Soledad; Schmukler, Sergio L.

Bank Involvement with SMEs : Beyond Relationship Lending

2008

de la Torre, Augusto | Martínez Pería, María Soledad | Schmukler, Sergio L.

The "conventional wisdom" in academic and policy circles argues that, while large and foreign banks are generally not interested in serving SMEs, small and niche banks have an advantage in doing so because they can overcome SME opaqueness through relationship lending. This paper shows that there is a gap between this view and what banks actually do. Banks perceive SMEs as a core and strategic business and seem well positioned to expand their links with SMEs. The recent intensification of bank involvement with SMEs in various emerging markets documented in this paper is neither led by small or niche banks nor highly dependent on relationship lending. Rather, all types of banks are catering to SMEs and larger, multiple-service banks have in fact a comparative advantage in offering a wide range of products and services on a large scale, through the use of new technologies, business models, and risk management systems.

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accounting advisory services agricultural sector bankruptcy capital market debt diversification economic development employment entrepreneurs families financial institutions fiscal policies fixed costs human capital information technology insurance interest rates international bank laws liquid assets management information systems operating costs profitability property rights questionnaires real estate repayment risk management savings senior small enterprises start-ups supply chains transaction costs working capital

Información bibliográfica

Editorial

World Bank, Washington, DC

Otras materias

Cash management; Savings accounts; Employee; Bank exposure; Financial intermediation; Asymmetric information; Small business lending; Small loans; Credit markets; Financial ratios; Current account; Credit decisions; Banking services; Future cash flow; Foreign banks; Business activity; Credit information; New entrants; Loan performance; Default risk; Credit risk; Statistical analyses; Financial markets; Consolidation; Banking industries; Large firms; Commercial finance; Bank assets; Universal banking; Creditor; Bank financing; Credit products; Bad debts; International finance; Transaction; International banks; Small banks; Long-term lending; Bankruptcy procedures; Creditors; Trade credit; Deposits; Micro enterprise; Repayment history; Banking industry; Debtors; Financial stability; Private sector loans; Lenders; Borrowing; External finance; Micro enterprises; Disclosure requirements; Opaque small businesses; Federal reserve bank; Capital markets; Sources of income; Information sharing; Foreign exchange; Moral hazard; Term credit; Banking sector; Credit guarantees; Access to finance; Account management; Small business borrowers; Business strategy; Financing obstacles; Forms of collateral; Trade financing; Financial institution; Credit scoring models; Debit cards; Buyers; Rating systems; Securities; Bank consolidation; Contract enforcement; Deposit products; Deposit account; Subsidiaries; Research assistance; Federal reserve bank of new york; Loan officer; Credit registries; Medium enterprises; Financial products; Small business finance; Bank competition; Borrower; Small business loans; Bank credit; Loan portfolios; Federal reserve; Small business; Business center; Financial system; Small business credit; Factoring; Bank involvement; Local financial institutions; Specialized banks; Bank lending; Risk premium; New business; Loan contract; European central bank; Group of banks; Small business finances; Federal reserve system; Access to credit; Creditworthiness; Credit risk management; Access to capital; Credit scoring; Credit bureaus; Consumer lending; Credit rating; Tax compliance; Equity financing; Business centers; Lending portfolio; Interest rate; Economic activity; Credit approval; Public banks; Central banks; Policy environments; Net worth; Small bank; Credit market; Credit cards; Financial constraints; Emerging markets; Savings products; Bank deposit; Loan; Online banking; Informal credit; Financial development; Money transfers; Oesterreichische nationalbank; Bank officials; Credit institutions; Affordable interest rates; Loan products; Lines of credit; Online sale; Accounts receivable; Development bank; Private banks; Lender; Checking account; Universal banks; Financial services; Banking system; Private equity; Checking accounts; Collateral; Lack of access; Large bank; Loan size; Economies of scale; Commercial banking; Large banks; Banking relationships; Opaque small business; Credit reporting; Probability; Approval process; Macroeconomic stability; National bankers; Credit card; Access to external finance; Credit line; Deposit; Large companies; Intangible assets; Commercial loan; Community banks; Loan applicant; Partial credit; Financial activity; Loan application

Licencia

Policy Research Working Paper No. 4649http://creativecommons.org/licenses/by/3.0/World BankCC BY 3.0 Unported

Fuente

Policy Research Working Paper No. 4649

En AGRIS desde: 2014-09-15

Formato: AGRIS AP

Proveedor de Datos

Este registro bibliográfico ha sido proporcionado por World Bank

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Enlaces

http://hdl.handle.net/10986/6670

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