Bank Financing for SMES: Evidence Across Countries and Bank-Ownership Types
CentER Discussion Paper Series No. 2009-71
30 Pages Posted: 11 Sep 2009
Date Written: September 1, 2009
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”.
Keywords: small and medium enterprises, bank ownership, lending technology, access to finance
JEL Classification: F23, G21, O16
Suggested Citation: Suggested Citation