growth of promising young firms. A model of liquidity-constrained entrepreneurs suggests that the easing of credit … would bring about. We explore this growth mechanism using a large-scale program to expand the supply of credit to small and … medium enterprises in Brazil. Local credit supply shocks generate greater firm entry but also greater exit with no effect on …

informal credit (loans from relatives and friends) and a household's access to bank credit. While most of the literature has … focused on the substitutability channel, we highlight that even households with full access to the formal credit market are … local credit supply on the diffusion of informal loans, using an IV approach. The results suggest that the complementarity …