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on Microfinance |
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Issue of 2025–01–06
two papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Tamas Briglevics (Boston College; Federal Reserve Bank of Boston); Artashes Karapetyan (ESSEC Business School); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Ibolya Schindele (Central European University; Corvinus University of Budapest; Central Bank of Hungary) |
| Abstract: | We exploit a nationwide introduction of mandatory disclosure of borrowers’ total credit exposures and show that sharing such information increases credit access independent of borrowers’ history. Differentiating between borrowers applying to competitor banks and those reapplying to their current banks, as well as between borrowers with and without default history, we find an overall increase in credit access measured by both loan application acceptance and credit amount. While credit access increases, default rates decrease, generating an increase in aggregate welfare. |
| Keywords: | Information sharing, Bank lending, Household access to credit |
| JEL: | G21 G28 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2484 |
| By: | Delis, Manthos; Iosifidi, Maria; Pnevmatikos, Lampros; Tsiritakis, Emmanuel |
| Abstract: | Credit negotiations can have real economic implications, especially for small firms that heavily rely on bank credit. We hypothesize and empirically establish through textual analysis that three characteristics reflecting credit negotiations are the time interval from loan application to approval or rejection, the probability of applying to another bank, and the probability of reapplying soon after a rejection. We show that poor and female entrepreneurs negotiate less vigorously, and identify several channels backing these effects, most notably education of loan applicants and firm R&D expenses. We also show how the identified effects influence loan approval and firm performance. |
| Keywords: | Credit negotiations; Small firms; Loan applications; Firm performance |
| JEL: | G0 G02 G2 G21 G30 |
| Date: | 2023–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123003 |