Credit granting to small firmsa Brazilian case

Resumo

Transaction costs limit the supply of credit to small and medium-sized firms (SMEs). From a sample of 65,535 SME credit proposals submitted to a large Brazilian bank between January 2004 and September 2006, this research analyzes credit granting decisions. Results suggest that small firms face credit rationing and that low risk credit contracts with liquid collateral are their primary source of credit. Also, the bank captures private information through its lending relationships with borrowers, which affects its credit granting decisions. The findings reveal that the bank under study faces difficulties in expanding the supply of credit to small firms mainly because of cost, collateral-dependency and constraints due to asymmetric information. (C) 2009 Elsevier Inc. All rights reserved.

Ficha do documento

Tipo

Artigo científico

Ano

2011

Instituição

Elsevier Science Inc

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1016/j.jbusres.2009.11.018

Identificador

oai:repositorio.fgv.br:10438/23205

Temas

Economia

Palavras-chave

Credit rationingSmall and medium-sized enterprises (SMEs)Small business financingAsymmetric informationTransaction costsEconomiaPequenas e médias empresas - BrasilCustos de transação