Publication:
Assessing Firms' Financing Constraints in Brazil

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dc.contributor.authorClaessens, Stijn
dc.contributor.authorSakho, Yaye Seynabou
dc.date.accessioned2014-02-03T21:36:30Z
dc.date.available2014-02-03T21:36:30Z
dc.date.issued2013-09
dc.description.abstractFirm surveys often indicate that firms complain a lot about lack of access to financial services, but financing constraints are difficult to identify, given demand and supply considerations and with only surveys based on firms' perceptions. Specifically, it is difficult to separate demand for access to finance of viable firms with good growth opportunities from that of firms that are not creditworthy and should not deserve financing. In Brazil, one of the main constraints to finance is related to the high level of interest rates, which affects both bank funding costs as well as bank intermediation spreads and, as such, the cost of finance and hence the demand and supply of bank financing. This paper analyzes a unique loan level data set that covers almost a decade of monthly firm bank information from credit registry information that is not publicly available as well as two cross-sections of Brazil's Investment Climate Assessment surveys in 2004 and 2008 that provide detailed information on firms' micro characteristics as well as perceptions of credit. The data allow identification of how firms' characteristics, banks' characteristics, and macro variables affect firms' demand for credit, banks' supply of credit, and access to credit. The paper finds first that access to finance for firms has improved over the decade for small firms, reflecting the deepening of the credit markets. However, access to credit depends strongly on information availability captured in the positive influence of collateral and credit history. Banks perceive that it is less risky to lend to firms that the banks know or that other banks know. Second, firms' loan demand is inelastic to the interest rate at the individual loan category level, possibly reflecting some screening and pricing; however, when the loans are aggregated, the effect of interest rates becomes significant and negative as expected. Third, firms loan demand and loan supply are affected by the availability of collateral and, in the case of loan demand, longer maturity. Policy implications point to the importance of reducing asymmetric information between lenders and borrowers and on collateral to alleviate financing constraints for small firms.en
dc.identifierhttp://documents.worldbank.org/curated/en/2013/09/18321821/assessing-firms-financing-constraints-brazil
dc.identifier.doi10.1596/1813-9450-6624
dc.identifier.urihttps://hdl.handle.net/10986/16842
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6624
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO BANK
dc.subjectACCESS TO CREDIT
dc.subjectACCESS TO FINANCE
dc.subjectACCESS TO FINANCIAL SERVICES
dc.subjectACCESS TO FINANCING
dc.subjectANTI-CREDITOR
dc.subjectAPPLICATION PROCEDURES
dc.subjectASYMMETRIC INFORMATION
dc.subjectAVAILABILITY OF COLLATERAL
dc.subjectBALANCE SHEET
dc.subjectBANK ACCOUNT
dc.subjectBANK CHARGES
dc.subjectBANK CREDIT
dc.subjectBANK FINANCING
dc.subjectBANK INTEREST RATES
dc.subjectBANK INTERMEDIATION
dc.subjectBANK LENDING
dc.subjectBANK LENDING RELATIONSHIP
dc.subjectBANK LIQUIDITY
dc.subjectBANK LOAN
dc.subjectBANK LOANS
dc.subjectBANK MONITORING
dc.subjectBANKING CRISIS
dc.subjectBANKING MARKETS
dc.subjectBANKING SYSTEM
dc.subjectBANKING SYSTEMS
dc.subjectBANKS
dc.subjectBIASES
dc.subjectBORROWER
dc.subjectBORROWING
dc.subjectBUSINESS CREDIT
dc.subjectBUSINESS CYCLE
dc.subjectCAPITAL LOANS
dc.subjectCAPITAL STOCK
dc.subjectCAPITAL STRUCTURE
dc.subjectCASH FLOW
dc.subjectCASH FLOWS
dc.subjectCASH PAYMENT
dc.subjectCD
dc.subjectCENTRAL BANK
dc.subjectCOLLATERAL
dc.subjectCOLLATERAL REQUIREMENT
dc.subjectCOLLATERALS
dc.subjectCOMMERCIAL BANKS
dc.subjectCONTRACT DESIGN
dc.subjectCONTRACT ENFORCEABILITY
dc.subjectCONTRACT ENFORCEMENT
dc.subjectCORPORATE FINANCING
dc.subjectCORPORATE INVESTMENT
dc.subjectCORRUPTION
dc.subjectCOST OF CAPITAL
dc.subjectCOST OF CREDIT
dc.subjectCOURT RULING
dc.subjectCREDIT ACCESS
dc.subjectCREDIT CRUNCH
dc.subjectCREDIT GROWTH
dc.subjectCREDIT HISTORY
dc.subjectCREDIT INFORMATION
dc.subjectCREDIT INSTRUMENT
dc.subjectCREDIT LIMIT
dc.subjectCREDIT LINE
dc.subjectCREDIT LINES
dc.subjectCREDIT MARKET
dc.subjectCREDIT MARKETS
dc.subjectCREDIT RATIONING
dc.subjectCREDIT RECORD
dc.subjectCREDIT REGISTRIES
dc.subjectCREDIT REGISTRY
dc.subjectCREDIT RISK
dc.subjectCREDITOR
dc.subjectCREDITOR CLAIM
dc.subjectCREDITORS
dc.subjectCREDITWORTHINESS
dc.subjectDEBT
dc.subjectDEBT OUTSTANDING
dc.subjectDEBTORS
dc.subjectDEMAND FOR CREDIT
dc.subjectDEPENDENT
dc.subjectDEVELOPING COUNTRIES
dc.subjectDIRECTED CREDIT
dc.subjectDISCRIMINATION
dc.subjectDOMESTIC BANK
dc.subjectDOMESTIC CREDIT
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC SYSTEMS
dc.subjectEMERGING MARKET
dc.subjectEQUILIBRIUM CREDIT
dc.subjectEQUILIBRIUM CREDIT RATIONING
dc.subjectEQUITY RATIO
dc.subjectEXCLUSION
dc.subjectEXTERNAL FINANCING
dc.subjectEXTERNAL FINANCING CONSTRAINTS
dc.subjectFINANCES
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INFORMATION
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INTERMEDIATION
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL PLANNING
dc.subjectFINANCIAL SERVICE
dc.subjectFINANCIAL SERVICE PROVIDERS
dc.subjectFINANCIAL STUDIES
dc.subjectFINANCIAL SYSTEMS
dc.subjectFINANCING CONSTRAINT
dc.subjectFINANCING CONSTRAINTS
dc.subjectGROWTH OPPORTUNITIES
dc.subjectHIGH INTEREST RATES
dc.subjectHOUSEHOLDS
dc.subjectHUMAN RESOURCES
dc.subjectINCOME GROUP
dc.subjectINCOME STATEMENT
dc.subjectINDIVIDUAL LOAN
dc.subjectINFLATION
dc.subjectINFORMATION ASYMMETRY
dc.subjectINSTITUTIONAL ENVIRONMENT
dc.subjectINSTRUMENT
dc.subjectINTEREST RATE
dc.subjectINTEREST RATE VOLATILITY
dc.subjectINTEREST RATES
dc.subjectINTEREST RATES FOR LOAN
dc.subjectINTERMEDIATION SPREADS
dc.subjectINTERNAL FINANCING
dc.subjectINTERNAL FUNDS
dc.subjectINTERNATIONAL BANK
dc.subjectINVENTORIES
dc.subjectINVESTMENT CLIMATE
dc.subjectINVESTMENT DECISION
dc.subjectINVESTMENT DECISIONS
dc.subjectINVESTMENT FINANCING
dc.subjectINVESTMENT FUNDS
dc.subjectINVESTMENT OPPORTUNITIES
dc.subjectJOB CREATION
dc.subjectJUDGE
dc.subjectJUDGES
dc.subjectJUDICIAL EXECUTION
dc.subjectJUDICIAL SYSTEM
dc.subjectJURISDICTION
dc.subjectLACK OF ACCESS
dc.subjectLACK OF COLLATERAL
dc.subjectLACK OF COMPETITION
dc.subjectLACK OF CREDIT
dc.subjectLARGE FIRMS
dc.subjectLEGAL CONSTRAINTS
dc.subjectLENDERS
dc.subjectLENDING INTEREST RATES
dc.subjectLEVEL OF INTEREST RATES
dc.subjectLIABILITY
dc.subjectLINE OF CREDIT
dc.subjectLOAN
dc.subjectLOAN CATEGORIES
dc.subjectLOAN CATEGORY
dc.subjectLOAN CHARACTERISTICS
dc.subjectLOAN CONTRACTS
dc.subjectLOAN DEMAND
dc.subjectLOAN MARKET
dc.subjectLOAN MATURITY
dc.subjectLOAN RATE
dc.subjectLOAN REQUEST
dc.subjectLOAN VOLUMES
dc.subjectMACROECONOMIC CONDITIONS
dc.subjectMACROECONOMIC INSTABILITY
dc.subjectMACROECONOMIC VARIABLES
dc.subjectMACROECONOMICS
dc.subjectMARKET COMPETITION
dc.subjectMARKET CONDITIONS
dc.subjectMARKET DEEPENING
dc.subjectMARKET FAILURES
dc.subjectMARKET LIQUIDITY
dc.subjectMARKET STRUCTURE
dc.subjectMARKET VALUE
dc.subjectMATURITIES
dc.subjectMONETARY FUND
dc.subjectMONETARY POLICY
dc.subjectOBSTACLES TO GROWTH
dc.subjectOPPORTUNITY COST
dc.subjectOUTSTANDING DEBT
dc.subjectOUTSTANDING DEBTS
dc.subjectOVERDRAFT
dc.subjectOVERDRAFT LOANS
dc.subjectOVERDRAFTS
dc.subjectPARTNER BANK
dc.subjectPERC
dc.subjectPOOR COLLATERAL
dc.subjectPOOR CREDIT
dc.subjectPOOR CREDIT HISTORY
dc.subjectPRIVATE BANKS
dc.subjectPRIVATE CREDIT
dc.subjectPRODUCTIVITY
dc.subjectPROFITABILITY
dc.subjectPROMISSORY NOTE
dc.subjectPROMISSORY NOTES
dc.subjectPUBLIC BANK
dc.subjectPUBLIC BANKS
dc.subjectREAL INTEREST
dc.subjectREAL INTEREST RATE
dc.subjectREAL INTEREST RATES
dc.subjectREGISTRY DATA
dc.subjectREGISTRY SYSTEM
dc.subjectREGULATORY POLICY
dc.subjectRESERVE
dc.subjectRESERVE BANK
dc.subjectRESERVE BANK OF AUSTRALIA
dc.subjectRETURNS
dc.subjectSETTLEMENT
dc.subjectSHORT-TERM INTEREST RATES
dc.subjectSHORT-TERM TRADE FINANCE
dc.subjectSMALL BANKS
dc.subjectSMALL BUSINESS
dc.subjectSMALL BUSINESS FINANCE
dc.subjectSMALL LOANS
dc.subjectSOURCES OF FINANCE
dc.subjectSTOCK MARKETS
dc.subjectSUPPLY OF CREDIT
dc.subjectTAX
dc.subjectTAX RATES
dc.subjectTAXATION
dc.subjectTERM CREDIT
dc.subjectTOTAL_DEBT
dc.subjectTRADE CREDITS
dc.subjectTRANSACTION
dc.subjectTRANSACTIONS COSTS
dc.subjectUSE OF COLLATERAL
dc.subjectUSURY
dc.subjectUSURY LAWS
dc.subjectWORKING CAPITAL
dc.titleAssessing Firms' Financing Constraints in Brazilen
dspace.entity.typePublication
okr.crossref.titleAssessing Firms' Financing Constraints in Brazil
okr.date.disclosure2013-09-01
okr.date.doiregistration2025-04-10T11:46:28.070539Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2013/09/18321821/assessing-firms-financing-constraints-brazil
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.guid213041468013153909
okr.identifier.doi10.1596/1813-9450-6624
okr.identifier.externaldocumentum000158349_20130930095312
okr.identifier.internaldocumentum18321821
okr.identifier.reportWPS6624
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/09/30/000158349_20130930095312/Rendered/PDF/WPS6624.pdfen
okr.region.administrativeLatin America & Caribbean
okr.region.countryBrazil
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicBanks and Banking Reform
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Bankruptcy and Resolution of Financial Distress
okr.topicMacroeconomics and Economic Growth
okr.unitPoverty Reduction and Economic Management Unit, Latin America and the Caribbean Region
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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