Bank Financing for SMES: Evidence Across Countries and Bank-Ownership Types
City University London - Sir John Cass Business School; Tilburg University - European Banking Center, CentER
World Bank - Financial and Private Sector Development; World Bank
Maria Soledad Martinez Peria
World Bank - Development Research Group (DECRG)
September 1, 2009
European Banking Center Discussion Paper No. 2009-20
CentER Discussion Paper Series No. 2009-71
Using data for 91 large banks from 45 countries, this paper finds few differences in the extent, type, and pricing of SME loans across foreign, private, and government-owned banks, even though different bank ownership types apply different lending technologies and have different organizational structures. Instead, we find significant differences across banks in developed and developing countries, driven by differences in the economic, institutional, and legal environment, as opposed to by differences in lending technologies and organizational structures. Finally, the link between lending technologies, organizational structures, and SME financing is not consistent with the conventional view that SME lending is based on “relationship lending”.
Number of Pages in PDF File: 30
Keywords: small and medium enterprises, bank ownership, lending technology, access to finance
JEL Classification: F23, G21, O16
Date posted: September 11, 2009
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