receives an earmarked credit from its bank, its interest rates on new loans in the free-market increase while the loan volume …This paper studies loan conditions in a context where private banks can operate in two credit markets: a free … credit to firms that are ex ante more difficult to lock-in in the free-market-larger firms in more contested regions. The …

discontinuity in the loan approval process of a large bank, the study finds that competing lenders responded to additional loan … financially excluded borrowers, greatly diminishing the profits accruing to the initiating bank. Lenders may therefore underinvest … highlight that information spillovers between lenders may operate outside credit registries …