Free riding in loan approvals : evidence from SME lending in Peru / Irani Arraiz, Miriam Bruhn, Benjamin N. Roth, Claudia Ruiz-Ortega, Rodolfo Stucchi
Contributor(s): Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Series: World Bank E-Library Archive | Policy research working paper ; 9072Publisher: [Washington, DC, USA] : World Bank Group, Development Economics, Development Research Group, December 2019Description: 1 Online-Ressource (circa 34 Seiten) : IllustrationenSubject(s): Genre/Form: Additional physical formats: Erscheint auch als: Free Riding in Loan Approvals: Evidence from SME Lending in Peru. Druck-Ausgabe Washington, D.C : The World Bank, 2019DOI: DOI: 10.1596/1813-9450-9072Online resources: Summary: This paper provides evidence that commercial lenders in Peru free ride off their peers' screening efforts. Leveraging a discontinuity in the loan approval process of a large bank, the study finds that competing lenders responded to additional loan approvals by issuing approvals of their own. Competing lenders captured almost three-quarters of the new loans to previously financially excluded borrowers, greatly diminishing the profits accruing to the initiating bank. Lenders may therefore underinvest in screening new borrowers and expanding financial inclusion, as their competitors reap some of the benefit. The results highlight that information spillovers between lenders may operate outside credit registriesPPN: PPN: 1691173258Package identifier: Produktsigel: ZDB-110-WBL | ZDB-1-WBA | ZDB-110-WBONo physical items for this record
Namensnennung 3.0 IGO CC BY 3.0 IGO cc: