Financing small businesses in France

Michel Dietsch

No 9/2003, EIB Papers from European Investment Bank, Economics Department

Abstract: This paper explores empirically the effect of consolidation in the French banking industry and of Basel II on the availability of credit for small and medium-sized enterprises (SMEs). Consolidation has been associated with an increase in the number of banks the average firm borrows from and this has improved credit availability. Furthermore, the paper shows, for France, that the current Basel II proposal would result in lower capital charges on SME loans due to portfolio diversification effects and low default correlations of SMEs. It also argues that the current Basel II proposal is conservative: capital charges could be even lower if they were based on our estimates of SME loan portfolio risk. Overall, in France, credit rationing of SMEs does not seem to be a serious problem and Basel II is unlikely to hold back SME lending.

Keywords: French banking industry; Basel II; Credit availability; SMEs; SME lending; Capital charges (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2003-06-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.eib.org/attachments/efs/eibpapers/eibpa ... 8_n02_en.pdf#page=92 Full text (application/pdf)

Related works:
Working Paper: Financing small businesses in France (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:eibpap:2003_009

Access Statistics for this paper

More papers in EIB Papers from European Investment Bank, Economics Department Contact information at EDIRC.
Bibliographic data for series maintained by Polyxeni Kanelliadou ().