Why discouraged borrowers exist? An empirical (re)examination from less developed countries

Ana Paula Matias Gama, Fábio Dias Duarte and José Paulo Esperança

Emerging Markets Review, 2017, vol. 33, issue C, 19-41

Abstract: Using the fourth-round database of the Business Environment and Enterprise Performance Survey (2008/09 BEEPS), this study examines the determinants of discouragement in less developed countries in Eastern Europe and Central Asia. The results show that whereas firms' opaqueness, demographic factors, and distance between lenders and borrowers better explain the discouragement due to tough loan prices and/or loan application procedures, firm risk and banking concentration explain the incidence of discouraged borrowers due to the fear of rationing. Innovator status, the legal protection of creditors and lenders in the event of default, and the coverage of information sharing instruments help explain discouragement in a transversal way.

Keywords: Discouraged borrowers; Less developed countries; Self-selection; SMEs (search for similar items in EconPapers)
JEL-codes: G14 G15 G21 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:33:y:2017:i:c:p:19-41

DOI: 10.1016/j.ememar.2017.08.003

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