Free Riding in Loan Approvals : Evidence from SME Lending in Peru (English)

This paper provides evidence that commercial lenders in Peru free ride off their peers' screening efforts. Leveraging a discontinuity in the loan approval process of a large bank, the study finds that competing lenders responded to additional loan approvals by issuing approvals of their own. Competing lenders captured almost three-quarters of the new loans to previously financially excluded borrowers, greatly diminishing the profits accruing to the...

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Author

Arraiz,Irani;

Bruhn,Miriam;

Roth,Benjamin N.;

Ruiz Ortega,Claudia;

Stucchi,Rodolfo Mario;
Document Date
2019/12/03
Document Type
Policy Research Working Paper
Report Number
WPS9072
Volume No
1
Total Volume(s)
1
Country
World,
Region
Other,
Disclosure Date
2019/12/03
Disclosure Status
Disclosed
Doc Name
Free Riding in Loan Approvals : Evidence from SME Lending in Peru
Keywords
partner bank

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Arraiz,Irani; Bruhn,Miriam; Roth,Benjamin N.; Ruiz Ortega,Claudia; Stucchi,Rodolfo Mario.

Free Riding in Loan Approvals : Evidence from SME Lending in Peru (English). Policy Research working paper|no. WPS 9072 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/203711575382940042

Free Riding in Loan Approvals : Evidence from SME Lending in Peru (English)

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