The decline of bank finance for SMEs in APEC Online publication date: Tue, 03-Aug-2010
by Chris Hall
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 11, No. 1, 2010
Abstract: Banks are still the single largest supplier of debt funds to SMEs in most developed economies. This paper shows, on the basis of publicly available data for APEC economies, that the real growth of bank lending to SMEs appears to be negative or to have declined in almost all economies over the decade from 1997. Prior to 1997, the real rate of growth of bank finance to SMEs was positive. By contrast, throughout the period 1994-2007, the growth of real lending to large firms has usually been positive and growing. The paper explores these trends in detail and reaches the conclusion that there has been a decline in the availability of bank finance to SMEs in the developed economies in absolute and real terms. The paper also examines some possible reasons for this phenomenon and discusses the implications. It concludes that the problems banks face meeting BIS Basle II requirements, in accounting for intangibles, and thus assessing collateral, is a possible contributor. Finally, the paper suggests ways that the World Bank and Bank of International Settlements (BIS) could make more effective use of available data from banks to better understand the phenomenon.
Online publication date: Tue, 03-Aug-2010
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Entrepreneurship and Small Business (IJESB):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org