Bank Branch Presence and Access to Credit in Low- to Moderate-Income Neighborhoods

Ozgur Ergungor ()

Journal of Money, Credit and Banking, 2010, vol. 42, issue 7, 1321-1349

Abstract: Banks specialize in lending to informationally opaque borrowers by collecting soft information about them. Some researchers claim that this process requires a physical presence in the market to lower information collection costs. This paper provides evidence in support of this argument in the mortgage market for low-income borrowers whose access to credit is limited by their inadequate credit histories. Mortgage originations increase and interest spreads decline when there is a bank branch located in a low- to moderate-income neighborhood. Copyright (c) 2010 The Ohio State University.

Date: 2010
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Working Paper: Bank branch presence and access to credit in low-to-moderate income neighborhoods (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:42:y:2010:i:7:p:1321-1349

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