Theory and you will past empirical work is uncertain toward effect of overseas financial entry to the SME lending

Theory and you will past empirical work is uncertain toward effect of overseas financial entry to the SME lending

In line with prior search, the clients out of international financial institutions was, an average of, large and you can riskier businesses with ‘weaker’ bank-credit relationship

Toward one-hand, ideas towards the organisational construction out of banking companies suggest that, given the hierarchical organisational structure, international financial institutions tend to give in order to highest and transparent firms relying into the ‘hard’, easy to techniques guidance. Residential finance companies, considering its decentralised construction, is actually, in addition, most useful provided to give fund in order to small and opaque enterprises situated towards the ‘soft’ suggestions (Stein 2002). Detragiache mais aussi al. (2008), including, reveal that foreign banking institutions will ‘cherry pick’ website subscribers and you will offer loans only to large and you will transparent agencies as they are top during the monitoring tough information. Continue reading Theory and you will past empirical work is uncertain toward effect of overseas financial entry to the SME lending