The evolution of credit terms: an empirical study of commercial bank lending to developing countries

Sule Ozler

No 355, Policy Research Working Paper Series from The World Bank

Abstract: This paper studies changes in spreads on bank loans to developing countries during 1968-81. It found that a borrower's experience had a significant impact on spreads. Spreads started at high values at low levels of loan experience and decreased as experience increased. Spreads at initial-experience levels were about 30 percent above benchmark, with experience. The impact of experience became negligible with 30 prior loans. The paper also suggests that a greater role for international organizations in collecting and disseminating information about potential borrowers. Indeed, international institutions have been doing more of this fact-finding since the onset of the debt crisis.

Keywords: Financial Intermediation; Economic Theory&Research; Banks&Banking Reform; Economic Adjustment and Lending; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 1990-02-28
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Citations: View citations in EconPapers (1)

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