One of the main problems of SMEs is how to finance their investments. The role of banks in this regard is crucial, since they can be a type of sources of financing through lending credits directly to SMEs. The key role of the paper thus relies on analyzing the effect of SMEs financing by the Iranian banking system.   The objective of this paper is to determine the influence of loans demanded...

The paper uses the concept of credit limit to analyze the determinants of household access to and participation in informal and formal credit markets in Malawi. Households are found to be credit constrained, on average, both in the formal and informal sectors; they borrow, on average, less than half of any increase in their credit lines. Furthermore, they are not discouraged in their participat...

Abstract The interaction of debt and economic performance has been getting more attention over the last few years. However, models making provision for are still outnumbered by completely ignoring it. This paper is first one to analyze relationship between household (in form bank loans) terms aggregate income) considering both impact wealth income distribution, MPC distribution under various fi...

We examine whether stringent formal sector borrowing requirements in developing countries restrict credit access and the potential of asset-collateralized loans. When a Kenyan dairy cooperative exogenously replaced high down payments with loans collateralized by the asset itself a large water tank loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements ...

To date, there is no consensus about how frictions in the credit market affect the transmission of the monetary policy to the real economy. The traditional money channel states that when the Central Bank reduces its reserves, commercial banks are forced to reduce their demand for deposits. If prices are sticky, in the short-run a decrease in real monetary holdings should lead to higher real int...

The Internal Ratings Based (IRB) approach suggested in the New Basel Accord regulations (BIS 2005) uses a capital allocation formula derived from a Merton style structural model of the credit risk of portfolios of corporate loans. Yet this formula is being applied in the case of consumer loans as well as corporate loans. This has highlighted that although there are a number of well established ...

We investigate differences in the characteristics and performance of securitized loans versus loans held on lenders’ balance sheets using a unique data set of commercial mort­ gages. The main findings are as follows. First, consistent with risk-sharing being a likely reason for securitization, loan size strongly predicts the likelihood of securiti­ zation. The largest 10% of loans have a 44% ch...

Dynamic incentives, where incentives to repay are generated by granting access to future loans, is one of the methodologies used by microfinance institutions (MFIs). In this paper, I present a model of dynamic incentives where lenders are uncertain over how much borrowers value future loans. Loan terms are determined endogenously, and loans become more favorable as the probability of default be...

Abstract: At the macro level, the time-series of the amounts of loans granted (a flow) and repaid (a flow) to the banking system in each period are not available. The information on these flows is important in many analyses, such as the impact of the bank lending on investment outlays. However, one can get the information concerning the structure of loans (a stock variable) regarding their dura...

We present a banking model with imperfect competition in which borrowers’ access to credit is improved when banks are able to transfer credit risks. However, the market for credit risk transfer (CRT) works smoothly only if the quality of loans is public information. If the quality of loans is private information, banks have an incentive to grant unprofitable loans in order to transfer them to o...