Title: Relationship banking and regional SME financing: the case of Wales

Authors: Hans Degryse; Kent Matthews; Tianshu Zhao

Addresses: Faculty of Economics and Business, Katholiek Universiteit Leuven, 69 Naamsestraat, 3000 Leuven, Belgium ' Cardiff Business School, Cardiff University, Colum Drive, Cardiff CF10 3EU, UK ' Birmingham Business School, University of Birmingham, Edgbaston Park Road, Birmingham B15 2TY, UK

Abstract: Regional disparities in credit availability across the UK have been highlighted in a series of studies as a factor affecting both new firm starts and small firm growth prospects. This paper suggests that relationship banking might be an important means of attenuating differences in credit availability. The paper focuses on the value of relationship banking to SMEs in Wales in the period following the global banking crisis. The results show that SMEs that had developed a customer-loan relationship with their banks had a lower probability of experiencing a worsened credit outcome than those that did not. The implications of the findings for regional finance provision are discussed.

Keywords: regional finance; relationship banking; SME financing; Wales.

DOI: 10.1504/IJBAAF.2017.085324

International Journal of Banking, Accounting and Finance, 2017 Vol.8 No.1, pp.93 - 118

Received: 19 Aug 2016
Accepted: 12 Jan 2017
Published online: 21 Jul 2017 *

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