A More Complete Conceptual Framework for Financing of Small and Medium Enterprises

The authors propose a more complete conceptual framework for analysis of credit availability for small and medium enterprises (SMEs). In this framework, lending technologies are the key conduit through which government policies and national financial structures affect credit availability. They empha...

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Main Authors:	Berger, Allen N., Udell, Gregory F.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ACCOUNTING STANDARDS ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK LENDING BANK PRIVATIZATION BANKRUPTCY BANKRUPTCY PROCEDURES BANKS CHECKING ACCOUNTS COMMERCIAL BANKS COMMERCIAL CREDIT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES CONVENTIONAL FACTORING CREDIT RISK DEBT DEPOSIT ACCOUNTS DEVELOPMENT BANKS ECONOMIC PERFORMANCE ECONOMIC SYSTEMS ECONOMIC THEORY ECONOMIES OF SCALE EMPLOYMENT EXOGENOUS VARIABLES FACTORING FEDERAL RESERVE SYSTEM FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL RATIOS FINANCIAL SERVICES FINANCIAL STRUCTURES FINANCIAL SYSTEMS FIXED ASSET FIXED ASSETS FOREIGN BANKS FOREIGN INVESTMENT GDP GNP GOVERNMENT POLICIES GOVERNMENT SUBSIDIES IMPLICIT CONTRACT INEFFICIENCY INTEREST RATE INTEREST RATES INVENTORY LAWS LIQUIDATION LIQUIDATION VALUE MANDATES MARKET DISCIPLINE MARKET VALUE MERGERS MORAL HAZARD ORGANIZATIONAL FORM PREDICTIONS PRESENT VALUE PRICE DISCRIMINATION PROFITABILITY PROPERTY RIGHTS RELATIONSHIP LENDING SMALL BANKS SMALL BUSINESS STATE OWNERSHIP STATEMENT STATEMENTS SUBSIDIARY TAX RATE TRADE CREDIT TRADE CREDITORS TRANSITION ECONOMIES WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2005/12/6474484/more-complete-conceptual-framework-financing-small-medium-enterprises http://hdl.handle.net/10986/8553

id	okr-10986-8553
recordtype	oai_dc
spelling	okr-10986-85532021-04-23T14:02:43Z A More Complete Conceptual Framework for Financing of Small and Medium Enterprises Berger, Allen N. Udell, Gregory F. ACCOUNTING ACCOUNTING STANDARDS ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK LENDING BANK PRIVATIZATION BANKRUPTCY BANKRUPTCY PROCEDURES BANKS CHECKING ACCOUNTS COMMERCIAL BANKS COMMERCIAL CREDIT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES CONVENTIONAL FACTORING CREDIT RISK DEBT DEPOSIT ACCOUNTS DEVELOPMENT BANKS ECONOMIC PERFORMANCE ECONOMIC SYSTEMS ECONOMIC THEORY ECONOMIES OF SCALE EMPLOYMENT EXOGENOUS VARIABLES FACTORING FEDERAL RESERVE SYSTEM FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL RATIOS FINANCIAL SERVICES FINANCIAL STRUCTURES FINANCIAL SYSTEMS FIXED ASSET FIXED ASSETS FOREIGN BANKS FOREIGN INVESTMENT GDP GNP GOVERNMENT POLICIES GOVERNMENT SUBSIDIES IMPLICIT CONTRACT INEFFICIENCY INTEREST RATE INTEREST RATES INVENTORY LAWS LIQUIDATION LIQUIDATION VALUE MANDATES MARKET DISCIPLINE MARKET VALUE MERGERS MORAL HAZARD ORGANIZATIONAL FORM PREDICTIONS PRESENT VALUE PRICE DISCRIMINATION PROFITABILITY PROPERTY RIGHTS RELATIONSHIP LENDING SMALL BANKS SMALL BUSINESS STATE OWNERSHIP STATEMENT STATEMENTS SUBSIDIARY TAX RATE TRADE CREDIT TRADE CREDITORS TRANSITION ECONOMIES WORKING CAPITAL The authors propose a more complete conceptual framework for analysis of credit availability for small and medium enterprises (SMEs). In this framework, lending technologies are the key conduit through which government policies and national financial structures affect credit availability. They emphasize a causal chain from policy to financial structures which affect the feasibility and profitability of different lending technologies. These technologies, in turn, have important effects on SME credit availability. Financial structures include the presence of different financial institution types and the conditions under which they operate. Lending technologies include several transactions technologies, plus relationship lending. The authors argue that the framework implicit in most of the literature is oversimplified, neglects key elements of the chain, and often yields misleading conclusions. A common oversimplification is the treatment of transactions technologies as a homogeneous group, unsuitable for serving informationally opaque SMEs, and a frequent misleading conclusion is that large institutions are disadvantaged in lending to opaque SMEs. 2012-06-20T18:51:53Z 2012-06-20T18:51:53Z 2005-12 http://documents.worldbank.org/curated/en/2005/12/6474484/more-complete-conceptual-framework-financing-small-medium-enterprises http://hdl.handle.net/10986/8553 English Policy Research Working Paper; No. 3795 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTING ACCOUNTING STANDARDS ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK LENDING BANK PRIVATIZATION BANKRUPTCY BANKRUPTCY PROCEDURES BANKS CHECKING ACCOUNTS COMMERCIAL BANKS COMMERCIAL CREDIT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES CONVENTIONAL FACTORING CREDIT RISK DEBT DEPOSIT ACCOUNTS DEVELOPMENT BANKS ECONOMIC PERFORMANCE ECONOMIC SYSTEMS ECONOMIC THEORY ECONOMIES OF SCALE EMPLOYMENT EXOGENOUS VARIABLES FACTORING FEDERAL RESERVE SYSTEM FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL RATIOS FINANCIAL SERVICES FINANCIAL STRUCTURES FINANCIAL SYSTEMS FIXED ASSET FIXED ASSETS FOREIGN BANKS FOREIGN INVESTMENT GDP GNP GOVERNMENT POLICIES GOVERNMENT SUBSIDIES IMPLICIT CONTRACT INEFFICIENCY INTEREST RATE INTEREST RATES INVENTORY LAWS LIQUIDATION LIQUIDATION VALUE MANDATES MARKET DISCIPLINE MARKET VALUE MERGERS MORAL HAZARD ORGANIZATIONAL FORM PREDICTIONS PRESENT VALUE PRICE DISCRIMINATION PROFITABILITY PROPERTY RIGHTS RELATIONSHIP LENDING SMALL BANKS SMALL BUSINESS STATE OWNERSHIP STATEMENT STATEMENTS SUBSIDIARY TAX RATE TRADE CREDIT TRADE CREDITORS TRANSITION ECONOMIES WORKING CAPITAL
spellingShingle	ACCOUNTING ACCOUNTING STANDARDS ADVERSE SELECTION AGENCY PROBLEMS ASSETS BANK LENDING BANK PRIVATIZATION BANKRUPTCY BANKRUPTCY PROCEDURES BANKS CHECKING ACCOUNTS COMMERCIAL BANKS COMMERCIAL CREDIT COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES CONVENTIONAL FACTORING CREDIT RISK DEBT DEPOSIT ACCOUNTS DEVELOPMENT BANKS ECONOMIC PERFORMANCE ECONOMIC SYSTEMS ECONOMIC THEORY ECONOMIES OF SCALE EMPLOYMENT EXOGENOUS VARIABLES FACTORING FEDERAL RESERVE SYSTEM FINANCIAL CONTRACTS FINANCIAL INSTITUTIONS FINANCIAL RATIOS FINANCIAL SERVICES FINANCIAL STRUCTURES FINANCIAL SYSTEMS FIXED ASSET FIXED ASSETS FOREIGN BANKS FOREIGN INVESTMENT GDP GNP GOVERNMENT POLICIES GOVERNMENT SUBSIDIES IMPLICIT CONTRACT INEFFICIENCY INTEREST RATE INTEREST RATES INVENTORY LAWS LIQUIDATION LIQUIDATION VALUE MANDATES MARKET DISCIPLINE MARKET VALUE MERGERS MORAL HAZARD ORGANIZATIONAL FORM PREDICTIONS PRESENT VALUE PRICE DISCRIMINATION PROFITABILITY PROPERTY RIGHTS RELATIONSHIP LENDING SMALL BANKS SMALL BUSINESS STATE OWNERSHIP STATEMENT STATEMENTS SUBSIDIARY TAX RATE TRADE CREDIT TRADE CREDITORS TRANSITION ECONOMIES WORKING CAPITAL Berger, Allen N. Udell, Gregory F. A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
relation	Policy Research Working Paper; No. 3795
description	The authors propose a more complete conceptual framework for analysis of credit availability for small and medium enterprises (SMEs). In this framework, lending technologies are the key conduit through which government policies and national financial structures affect credit availability. They emphasize a causal chain from policy to financial structures which affect the feasibility and profitability of different lending technologies. These technologies, in turn, have important effects on SME credit availability. Financial structures include the presence of different financial institution types and the conditions under which they operate. Lending technologies include several transactions technologies, plus relationship lending. The authors argue that the framework implicit in most of the literature is oversimplified, neglects key elements of the chain, and often yields misleading conclusions. A common oversimplification is the treatment of transactions technologies as a homogeneous group, unsuitable for serving informationally opaque SMEs, and a frequent misleading conclusion is that large institutions are disadvantaged in lending to opaque SMEs.
format	Publications & Research :: Policy Research Working Paper
author	Berger, Allen N. Udell, Gregory F.
author_facet	Berger, Allen N. Udell, Gregory F.
author_sort	Berger, Allen N.
title	A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
title_short	A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
title_full	A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
title_fullStr	A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
title_full_unstemmed	A More Complete Conceptual Framework for Financing of Small and Medium Enterprises
title_sort	more complete conceptual framework for financing of small and medium enterprises
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/12/6474484/more-complete-conceptual-framework-financing-small-medium-enterprises http://hdl.handle.net/10986/8553
_version_	1764408106387767296

A More Complete Conceptual Framework for Financing of Small and Medium Enterprises

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