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On the existence of credit rationing and screening with loan size in competitive markets with imperfect information

Kraus, Daniel - 2013 - This version: September 10, 2013

Although credit rationing has been a stylized fact since the groundbreaking papers by Stiglitz and Weiss (1981, hereinafter S-W) and Besanko and Thakor (1987a, hereinafter B-T), Arnold and Riley (2009) note that credit rationing is unlikely in the S-W model, and Clemenz (1993) shows that it does...

Persistent link: https://www.econbiz.de/10009790502

The threat of capital drain : a rationale for public banks?

Hakenes, Hendrik; Schnabel, Isabel - 2006

This paper yields a rationale for why subsidized public banks may be desirable from a regional perspective in a financially integrated economy. We present a model with credit rationing and heterogeneous regions in which public banks prevent a capital drain from poorer to richer regions by...

Persistent link: https://www.econbiz.de/10010373500

Credit market imperfection, lack of entrepreneurs and capital outflow from a developing economy

Marjit, Sugata; Mishra, Suryaprakash - 2020

This paper explores the impact of credit market on the entrepreneurs and demand for credit in a credit constrained economy and the resultant impact on the capital flows. In standard trade models the capital flows across countries are explained as a result of the rate of return differentials due...

Persistent link: https://www.econbiz.de/10012263312

Bank lending, geographical distance, and credit risk : an empirical assessment of the Church Tower Principle

Carling, Kenneth; Lundberg, Sofia - 2002

Does the Church Tower Principle, i.e. geographical proximity between borrowing firm and lending bank, matter in credit risk management? If so, the bank might expose itself to a greater risk by lending to distant firms and should therefore respond by rationing them harder. In this paper we...

Persistent link: https://www.econbiz.de/10011585141

Hasan, Iftekhar; Lee, Haekwon; Qiu, Buhui; Saunders, Anthony - 2023

Using lenders becoming members of the Task Force on Climate-Related Financial Disclosures (TCFD) as a plausible exogeneous shock, we examine whether and how lenders' commitment to transparent climate-related disclosures affects borrower firms' environmental performance. We find that client firms...

Persistent link: https://www.econbiz.de/10014248728

Chapter 8. Financial Intermediation

Gorton, Gary; Winton, Andrew - 2003

The savings/investment process in capitalist economies is organized around bank-like financial intermediaries (“banks”), making them a central institution of economic growth. These intermediaries borrow from consumer/savers and lend to companies that need resources for investment. In...

Persistent link: https://www.econbiz.de/10014023868

Group lending versus individual lending in microfinance

Lehner, Maria - 2009

Microfinance is typically associated with joint liability of group members. However, a large part of microfinance … contracts. Moreover, we show that microfinance institutions offer group loans when the loan size is rather large, refinancing … costs are high, and competition between microfinance institutions is low. Otherwise, individual loans are offered …

Persistent link: https://www.econbiz.de/10003935668

Refinancing MFIs with market power : theory and evidence

Arnold, Lutz; Booker, Benedikt; Dorfleitner, Gregor; … - 2016

This paper presents a model of the complete microcredit financing chain investor - MIV - MFI - micro-borrower, in which social-minded MIVs provide funds only to those MFIs which do not exploit their bargaining power towards micro-borrowers. The MFIs with the highest bargaining power do not use...

Persistent link: https://www.econbiz.de/10011418233

When pro-poor microcredit institutions favor richer borrowers : a moral hazard story

Biancini, Sara; Ettinger, David; Venet, Baptiste - 2021

We suggest an explanation for the existence of "mission drift", the tendency for Microfinance Institutions (MFIs) to …

Persistent link: https://www.econbiz.de/10012433762

When do we have borrower or credit volume rationing in competitive credit market with imperfect information?

Kraus, Daniel - 2010

This paper examines the conditions for credit volume or borrower rationing in a competitive credit market in which the project characteristics are private information of the borrowers. There can only be credit volume rationing if the higher-risk credit applicants have a higher return in the...

Persistent link: https://www.econbiz.de/10008697924

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