Local Banks as Difficult-to-replace SME Lenders: Evidence from Bank Corrective Programs

In this study, we assess capabilities of different types of banks to cater to the financial needs of small and medium-sized enterprises (SMEs). Using a comprehensive dataset from an emerging economy, including the information on local banks’ corrective programs, we find that local banks remain difficult-to-replace lenders for SMEs. We show that presence of healthy local banks in an SME's vicinity immunizes the SME against the deterioration of access to bank financing linked to other local banks’ corrective programs. In contrast, large banks are unable to replace the lost lending from local competitors under corrective programs.

15. February 2021

Authors Iftekhar Hasan Krzysztof Jackowicz Robert Jagiełło Oskar Kowalewski Łukasz Kozłowski

Whom to contact

For Researchers

Professor Iftekhar Hasan, PhD
Professor Iftekhar Hasan, PhD

If you have any further questions please contact me.

Request per E-Mail

For Journalists

Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoSupported by the BMWK