Is Small Beautiful? Financial Structure, Size and Access to Finance
Combining two unique data sets, this paper explores the relationship between the relative importance of different financial institutions and their average size and firms' access to financial services. Specifically, the authors explore the rela...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110922133048 http://hdl.handle.net/10986/3569 |
| Summary: | Combining two unique data sets, this
paper explores the relationship between the relative
importance of different financial institutions and their
average size and firms' access to financial services.
Specifically, the authors explore the relationship between
the share in total financial assets and average asset size
of banks, low-end financial institutions, and specialized
lenders, on the one hand, and firms' access to and use
of deposit and lending services, on the other hand. Two
findings stand out. First, the dominance of banks in most
developing and emerging markets is associated with lower use
of financial services by firms of all sizes. Low-end
financial institutions and specialized lenders seem
particularly suited to ease access to finance in low-income
countries. Second, there is no evidence that smaller
institutions are better in providing access to finance. To
the contrary, larger specialized lenders and larger banks
might actually ease small firms' financing constraints,
but only at low levels of gross domestic product per capita. |
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