Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices
Using data from a survey of 91 banks in 45 countries, the authors characterize bank financing to small and medium enterprises (SMEs) around the world. They find that banks perceive the SME segment to be highly profitable, but perceive macroeconomic...
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| Format: | Policy Research Working Paper |
| Language: | English |
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Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/11/10048262/bank-financing-smes-around-world-drivers-obstacles-business-models-lending-practices http://hdl.handle.net/10986/6315 |
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okr-10986-6315 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO INFORMATION BANK CONSOLIDATION BANK FINANCING BANK INVOLVEMENT BANK LENDING BANK LOANS BANK POLICY BANKING INDUSTRY BANKING PRACTICES BANKING RELATIONSHIPS BANKING SYSTEM BANKS BEST PRACTICES BRANCH NETWORKS BUSINESS LOANS CAPITAL REQUIREMENTS COLLATERAL CONSOLIDATION COST OF CREDIT CREDIT ASSESSMENT CREDIT BUREAU CREDIT BUREAUS CREDIT DECISIONS CREDIT HISTORY CREDIT HISTORY INFORMATION CREDIT INFORMATION CREDIT PROGRAM CREDIT PROGRAMS CREDIT REGISTRIES CREDIT REGISTRY CREDIT SCORING DECENTRALIZATION DEFAULTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DIRECTED CREDIT DOCUMENTATION REQUIREMENTS DOMESTIC BANKS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYMENT EQUIPMENT EXCHANGE RATE EXTERNAL FINANCE FACTORING FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL PRODUCTS FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCING OBSTACLES FOREIGN BANKS FORM OF COLLATERAL FORMS OF COLLATERAL GOVERNMENT BANKS GOVERNMENT SUPPORT GUARANTEE SCHEMES HIGH INTEREST RATES INCOME INCOME GROUP INFORMATION SHARING INTEREST RATE INTEREST RATES INTEREST SUBSIDIES INTERNATIONAL BANK INTERNATIONAL FINANCE INVESTMENT LOANS INVESTMENT PURPOSES LARGE BANKS LARGE BUSINESS LARGE BUSINESSES LARGE ENTERPRISE LARGE ENTERPRISES LARGE FIRM LARGE FIRMS LEGAL CONSTRAINTS LENDING DECISION LENDING DECISIONS LENDING TECHNIQUES LIQUID ASSETS LOAN LOAN APPROVAL LOAN APPROVALS LOAN DECISION LOAN DECISIONS LOAN EXPOSURES LOAN MARKET LOAN OFFICER LOAN RECOVERY MACROECONOMIC CONDITIONS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMICS MARKET SHARE MARKET SIZE MEDIUM ENTERPRISES NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS PERSONAL GUARANTEE PERSONAL GUARANTEES PRIVATE BANKS PRIVATE CREDIT PROFITABILITY PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC POLICY QUESTIONNAIRE REAL ESTATE REAL ESTATE AS COLLATERAL RELATIONSHIP LENDING RESEARCH ASSISTANCE RISK MANAGEMENT SALE SALES SHARE OF INVESTMENT SMALL BANKS SMALL BUSINESS SMALL BUSINESS FINANCE SMALL BUSINESS LENDING SMALL BUSINESS LOANS SMALL BUSINESSES SMALL ENTERPRISE SMALL ENTERPRISES SMALL LOANS SUPPORT PROGRAMS TYPES OF ASSETS UNIVERSAL BANKING USE OF COLLATERAL |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO INFORMATION BANK CONSOLIDATION BANK FINANCING BANK INVOLVEMENT BANK LENDING BANK LOANS BANK POLICY BANKING INDUSTRY BANKING PRACTICES BANKING RELATIONSHIPS BANKING SYSTEM BANKS BEST PRACTICES BRANCH NETWORKS BUSINESS LOANS CAPITAL REQUIREMENTS COLLATERAL CONSOLIDATION COST OF CREDIT CREDIT ASSESSMENT CREDIT BUREAU CREDIT BUREAUS CREDIT DECISIONS CREDIT HISTORY CREDIT HISTORY INFORMATION CREDIT INFORMATION CREDIT PROGRAM CREDIT PROGRAMS CREDIT REGISTRIES CREDIT REGISTRY CREDIT SCORING DECENTRALIZATION DEFAULTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DIRECTED CREDIT DOCUMENTATION REQUIREMENTS DOMESTIC BANKS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYMENT EQUIPMENT EXCHANGE RATE EXTERNAL FINANCE FACTORING FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL PRODUCTS FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCING OBSTACLES FOREIGN BANKS FORM OF COLLATERAL FORMS OF COLLATERAL GOVERNMENT BANKS GOVERNMENT SUPPORT GUARANTEE SCHEMES HIGH INTEREST RATES INCOME INCOME GROUP INFORMATION SHARING INTEREST RATE INTEREST RATES INTEREST SUBSIDIES INTERNATIONAL BANK INTERNATIONAL FINANCE INVESTMENT LOANS INVESTMENT PURPOSES LARGE BANKS LARGE BUSINESS LARGE BUSINESSES LARGE ENTERPRISE LARGE ENTERPRISES LARGE FIRM LARGE FIRMS LEGAL CONSTRAINTS LENDING DECISION LENDING DECISIONS LENDING TECHNIQUES LIQUID ASSETS LOAN LOAN APPROVAL LOAN APPROVALS LOAN DECISION LOAN DECISIONS LOAN EXPOSURES LOAN MARKET LOAN OFFICER LOAN RECOVERY MACROECONOMIC CONDITIONS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMICS MARKET SHARE MARKET SIZE MEDIUM ENTERPRISES NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS PERSONAL GUARANTEE PERSONAL GUARANTEES PRIVATE BANKS PRIVATE CREDIT PROFITABILITY PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC POLICY QUESTIONNAIRE REAL ESTATE REAL ESTATE AS COLLATERAL RELATIONSHIP LENDING RESEARCH ASSISTANCE RISK MANAGEMENT SALE SALES SHARE OF INVESTMENT SMALL BANKS SMALL BUSINESS SMALL BUSINESS FINANCE SMALL BUSINESS LENDING SMALL BUSINESS LOANS SMALL BUSINESSES SMALL ENTERPRISE SMALL ENTERPRISES SMALL LOANS SUPPORT PROGRAMS TYPES OF ASSETS UNIVERSAL BANKING USE OF COLLATERAL Beck, Thorsten Demirgüç-Kunt, Asli Martínez Pería, María Soledad Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| relation |
Policy Research Working Paper; No. 4785 |
| description |
Using data from a survey of 91 banks in
45 countries, the authors characterize bank financing to
small and medium enterprises (SMEs) around the world. They
find that banks perceive the SME segment to be highly
profitable, but perceive macroeconomic instability in
developing countries and competition in developed countries
as the main obstacles. To serve SMEs banks have set up
dedicated departments and decentralized the sale of products
to the branches. However, loan approval, risk management,
and loan recovery functions remain centralized. Compared
with large firms, banks are less exposed to small
enterprises, charge them higher interest rates and fees, and
experience more non-performing loans from lending to them.
Although there are some differences in SMEs financing across
government, private, and foreign-owned banks - with the
latter being more likely to engage in arms-length lending -
the most significant differences are found between banks in
developed and developing countries. Banks in developing
countries tend to be less exposed to SMEs, provide a lower
share of investment loans, and charge higher fees and
interest rates. Overall, the evidence suggests that the
lending environment is more important than firm size or bank
ownership type in shaping bank financing to SMEs. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Beck, Thorsten Demirgüç-Kunt, Asli Martínez Pería, María Soledad |
| author_facet |
Beck, Thorsten Demirgüç-Kunt, Asli Martínez Pería, María Soledad |
| author_sort |
Beck, Thorsten |
| title |
Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| title_short |
Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| title_full |
Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| title_fullStr |
Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| title_full_unstemmed |
Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices |
| title_sort |
bank financing for smes around the world : drivers, obstacles, business models, and lending practices |
| publisher |
Washington, DC: World Bank |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/11/10048262/bank-financing-smes-around-world-drivers-obstacles-business-models-lending-practices http://hdl.handle.net/10986/6315 |
| _version_ |
1764399851810848768 |
| spelling |
okr-10986-63152021-04-23T14:02:30Z Bank Financing for SMEs around the World : Drivers, Obstacles, Business Models, and Lending Practices Beck, Thorsten Demirgüç-Kunt, Asli Martínez Pería, María Soledad ACCESS TO CREDIT ACCESS TO FINANCE ACCESS TO INFORMATION BANK CONSOLIDATION BANK FINANCING BANK INVOLVEMENT BANK LENDING BANK LOANS BANK POLICY BANKING INDUSTRY BANKING PRACTICES BANKING RELATIONSHIPS BANKING SYSTEM BANKS BEST PRACTICES BRANCH NETWORKS BUSINESS LOANS CAPITAL REQUIREMENTS COLLATERAL CONSOLIDATION COST OF CREDIT CREDIT ASSESSMENT CREDIT BUREAU CREDIT BUREAUS CREDIT DECISIONS CREDIT HISTORY CREDIT HISTORY INFORMATION CREDIT INFORMATION CREDIT PROGRAM CREDIT PROGRAMS CREDIT REGISTRIES CREDIT REGISTRY CREDIT SCORING DECENTRALIZATION DEFAULTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DIRECTED CREDIT DOCUMENTATION REQUIREMENTS DOMESTIC BANKS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYMENT EQUIPMENT EXCHANGE RATE EXTERNAL FINANCE FACTORING FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL PRODUCTS FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCING OBSTACLES FOREIGN BANKS FORM OF COLLATERAL FORMS OF COLLATERAL GOVERNMENT BANKS GOVERNMENT SUPPORT GUARANTEE SCHEMES HIGH INTEREST RATES INCOME INCOME GROUP INFORMATION SHARING INTEREST RATE INTEREST RATES INTEREST SUBSIDIES INTERNATIONAL BANK INTERNATIONAL FINANCE INVESTMENT LOANS INVESTMENT PURPOSES LARGE BANKS LARGE BUSINESS LARGE BUSINESSES LARGE ENTERPRISE LARGE ENTERPRISES LARGE FIRM LARGE FIRMS LEGAL CONSTRAINTS LENDING DECISION LENDING DECISIONS LENDING TECHNIQUES LIQUID ASSETS LOAN LOAN APPROVAL LOAN APPROVALS LOAN DECISION LOAN DECISIONS LOAN EXPOSURES LOAN MARKET LOAN OFFICER LOAN RECOVERY MACROECONOMIC CONDITIONS MACROECONOMIC ENVIRONMENT MACROECONOMIC INSTABILITY MACROECONOMICS MARKET SHARE MARKET SIZE MEDIUM ENTERPRISES NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS PERSONAL GUARANTEE PERSONAL GUARANTEES PRIVATE BANKS PRIVATE CREDIT PROFITABILITY PRUDENTIAL REGULATIONS PUBLIC BANKS PUBLIC POLICY QUESTIONNAIRE REAL ESTATE REAL ESTATE AS COLLATERAL RELATIONSHIP LENDING RESEARCH ASSISTANCE RISK MANAGEMENT SALE SALES SHARE OF INVESTMENT SMALL BANKS SMALL BUSINESS SMALL BUSINESS FINANCE SMALL BUSINESS LENDING SMALL BUSINESS LOANS SMALL BUSINESSES SMALL ENTERPRISE SMALL ENTERPRISES SMALL LOANS SUPPORT PROGRAMS TYPES OF ASSETS UNIVERSAL BANKING USE OF COLLATERAL Using data from a survey of 91 banks in 45 countries, the authors characterize bank financing to small and medium enterprises (SMEs) around the world. They find that banks perceive the SME segment to be highly profitable, but perceive macroeconomic instability in developing countries and competition in developed countries as the main obstacles. To serve SMEs banks have set up dedicated departments and decentralized the sale of products to the branches. However, loan approval, risk management, and loan recovery functions remain centralized. Compared with large firms, banks are less exposed to small enterprises, charge them higher interest rates and fees, and experience more non-performing loans from lending to them. Although there are some differences in SMEs financing across government, private, and foreign-owned banks - with the latter being more likely to engage in arms-length lending - the most significant differences are found between banks in developed and developing countries. Banks in developing countries tend to be less exposed to SMEs, provide a lower share of investment loans, and charge higher fees and interest rates. Overall, the evidence suggests that the lending environment is more important than firm size or bank ownership type in shaping bank financing to SMEs. 2012-05-22T19:01:26Z 2012-05-22T19:01:26Z 2008-11 http://documents.worldbank.org/curated/en/2008/11/10048262/bank-financing-smes-around-world-drivers-obstacles-business-models-lending-practices http://hdl.handle.net/10986/6315 English Policy Research Working Paper; No. 4785 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research :: Policy Research Working Paper Publications & Research |