Identifying Zombie Lending: Evidence Using Loan-Level Data

79 Pages Posted: 21 Apr 2018

Date Written: April 5, 2018


We identify ever-greening motivated by loan officer incentives. We devise a novel zombie lending measure in a setting dominated by non-verifiable information. We identify loans that are renewed quickly after repayment of the previous loan, where the same officer is in charge during the issuance of both loans, and transactions are consummated close to the repayment deadline for the first loan as cases that are plausibly ever-greened. We find that loans get repeatedly ever-greened during the tenure of a loan officer and default soon after the officer moves out of a branch pursuant to time based mandatory job rotation.

Keywords: Zombie Lending

JEL Classification: G19, G21

Suggested Citation

Tantri, Prasanna L., Identifying Zombie Lending: Evidence Using Loan-Level Data (April 5, 2018). Available at SSRN: or

Prasanna L. Tantri (Contact Author)

Indian School of Business ( email )

Hyderabad, Gachibowli 500 032
9160099959 (Phone)

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