This paper studies loan conditions in a context where private banks can operate in two credit markets: a free-market with no government intervention and an earmarked market that relies on government funds and where interest rates are regulated. The paper examines the effects of earmarked lending...

This paper studies credit allocation when government loan programs are distributed by private banks. The study focuses on Brazil, where private lenders can operate in two credit markets: competitive loans with own funding and earmarked loans that rely on government funds to finance firms at...