credit access in latin american enterprises

An intense process of deregulation and financial liberalization in Latin America has increased competitive pressures and led to bank restructuring and consolidation. This chapter looks at firm access to credit in the region, focusing on the role of credit market structure. Using firm-level data from the World Bank Enterprise Survey, we find that access to bank credit is very heterogeneous. On average, smaller and less productive firms are less likely to apply for credit and more likely to be financially constrained. We also find that a high degree of bank penetration and competition are significantly correlated with a lower probability that borrowers are financially constrained. The penetration of foreign banks has a negative effect on access to credit, particularly in less developed and more concentrated markets, while it has a positive influence in more competitive and financially developed markets

Money, Banking and Territories. A MoFIR View

The chapter relates the experience of the Money and Finance Research Group (MoFIR) established almost two decades ago within the UNIVPM. It synthesizes some of the authors' main contributions on three main lines of research: the international and European monetary systems, the relationship between banking structures and local development, and the potential discriminatory effects of regulatory policies

Demand and Supply Determinants of Credit Availability: Evidence from the Current Credit Crisis for European SMEs

The aim of this chapter is to examine the importance of demand and supply factors in determining credit availability during the recent financial crisis for a different sample of small- and medium-sized enterprises (SMEs) in some principal European countries. A first investigation suggests that during crisis time, the credit demand is mainly driven by liquidity problems. As for the determinants of credit demand, it emerges a different pattern among countries more bank than market oriented. Then, controlling for the supply of credit two types of credit rationing have been investigated. Weak rationing defines that condition for which firms asking for credit at the same interest rate did not receive it. To be strongly bank dependent implies a greater probability to be weakly credit rationed in crisis times. Differently solid accounting data, collateral and greater size may loosen such a condition. Finally, we control for strong rationing, i.e., the condition for which a firm even if ready to accept worse interest rates is subject to rationing. Evidence suggests that relationship-lending attitude as well as larger size could weaken the rationing condition; differently collateral as well as R&D propensity may exacerbate it because of moral hazard risk and higher information asymmetries

Earnings Quality and the Cost of Debt of SMEs

Based on a panel of Italian SMEs over the period 2004–2012, we investigate the relationship between earnings quality and the cost of debt . We find a negative association between accruals quality and the cost of debt for SMEs . The results hold even when controlling for different measures of accruals quality, alternative determinants of bank debt and the potential endogeneity between leverage and earnings quality