Second-tier Government Banks and Access to Credit: Micro-Evidence from Colombia

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dc.contributor.author Eslava, Marcela en
dc.contributor.author Maffioli, Alessandro en
dc.contributor.author Meléndez Arjona, Marcela en
dc.description.abstract Government-owned development banks have often been justified by the need to respond to financial market imperfections that hinder the establishment and growth of promising businesses, and as a result, stifle economic development more generally. However, evidence on the effectiveness of these banks in mitigating financial constraints is still lacking. To fill this gap, this paper analyzes the impact of Bancoldex, Colombia's publicly owned development bank, on access to credit. It uses a unique dataset that contains key characteristics of all loans issued to businesses in Colombia, including the financial intermediary through which the loan was granted and whether the loan was funded with Bancoldex resources. The paper assesses effects on access to credit by comparing Bancoldex loans to loans from other sources and study the impact of receiving credit from Bancoldex on a firm's subsequent credit history. To address concerns about selection bias, it uses a combination of models that control for fixed effects and matching techniques. The findings herein show that credit relationships involving Bancoldex funding are characterized by lower interest rates, larger loans, and loans with longer terms. These characteristics translated into lower average interest rates and larger average loans for firms that used Bancoldex credit. Average loans of Bancoldex' beneficiaries also exhibit longer terms, although this effect can take two years to materialize. Finally, the findings show evidence of a demonstration effect of Bancoldex: beneficiary firms that have access Bancoldex credit are able to significantly expand the number of intermediaries with whom they have credit relationships. en
dc.subject Financial Markets en
dc.subject Financial Policy en
dc.subject Financial Services en
dc.subject Small and Medium-Sized Enterprises en
dc.title Second-tier Government Banks and Access to Credit: Micro-Evidence from Colombia en
dc.identifier.jel C23 - Panel Data Models ¿ Spatio-temporal Models en
dc.identifier.jel G28 - Government Policy and Regulation en
dc.identifier.jel H43 - Project Evaluation ¿ Social Discount Rate en
dc.identifier.jel O12 - Microeconomic Analyses of Economic Development en
dc.identifier.jel O16 - Financial Markets ¿ Saving and Capital Investment ¿ Corporate Finance and Governance en
dc.identifier.jel O54 - Latin America ¿ Caribbean en
dc.coverage.placename Colombia en
dc.date.accessioned 2012-03-23T15:41:40Z
dc.date.available 2012-03-23T15:41:40Z
dc.date.issued 2012-03
dc.identifier.uri http://www.iadb.org/en/publications/publication-detail,7101.html?id=36046
dc.format.extent 51
dc.format.medium ACROBAT
dc.language.iso en
dc.relation.ispartof http://thesaurus.iadb.org/publicthesauri/122220115417319003759445
dc.subject Second-tier development banks, access to credit, impact evaluation, panel data, interest rates, loan size, loan term, demonstration effects
dc.type Working Papers
lacea.language.supported en
dc.date.modified 2014-08-29T09:19:29Z

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