The Determinants of Lending Relationships in the Tunisian Context

Abdelwahed Omri, Meryem Bellouma and Mohamed Ali Omri

Journal of Emerging Market Finance, 2005, vol. 4, issue 2, 135-150

Abstract: The quantity and quality of information generated through the development of lending relationships influences the bank's decision concerning granting of credit. Indeed, the need for a strong guarantee and the setting up of an adequate interest rate are not the only means that allow creditors to overcome the problem of inadequate information about the client. To establish the main determinants of the customer's relationship in Tunisia, our study is based on a sample of 76 companies dealing with a Tunisian bank over a period from 1998 to 2000. We found that the interest rate charged by the bank, the guarantees required and the risk level of the firms are the main determinants of the customer's relationship, and the only three control variables that are significant.

Keywords: Asymmetric information; credit decision; monopolistic power of banks; customer relationships; Tunisian firms (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:4:y:2005:i:2:p:135-150

DOI: 10.1177/097265270500400202

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