Bank lending to small businesses in Latin America : does Bank origin matter?

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Bank lending to small businesses in Latin America : does Bank origin matter?, Volume 1

Author:	Clarke, George R. G.; Cull, Robert; Martinez Peria, Maria Soledad; Sanchez, Susana M.;	Collection Title:	Policy, Research working paper series ; no. WPS 2760
Country:	Colombia; Peru; Chile; Argentina;	Date Stored:	2002/02/16
Document Date:	2002/01/31	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Finance
Region:	Latin America & Caribbean	Report Number:	WPS2760
Sub Sectors:	Financial Sector Development	SubTopics:	Financial Crisis Management & Restructuring; Payment Systems & Infrastructure; Economic Theory & Research; Banks & Banking Reform; Banking Law; Financial Intermediation
Volume No:	1

Summary: In recent years foreign bank participation has increased tremendously in Latin America. Some observers argue that foreign bank entry will benefit Latin American banking systems by reducing the volatility of loans and deposits and increasing efficiency. Others are concerned that foreign banks might choose to extend credit only to certain customers, leaving some sectors-such as small businesses-unserved. The authors examine this issue. Using bank-level data for Argentina, Chile, Colombia, and Peru during the mid-1990s, they empirically investigate whether bank origin affects the share and growth rate of bank lending to small businesses. They find that although foreign banks generally lent less to small businesses (as share of total lending) than private domestic banks, the difference is due primarily to the behavior of small foreign banks. The difference was considerably smaller for large and medium-sized banks. And in Chile and Colombia, large foreign banks might actually lend slightly more (as share of total lending) than large domestic banks.


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File Type		Description	File Size (mb)

	PDF 42 pages	Official version*	2.94 (approx.)
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	PDF 37 pages	WPS2760	0.12

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