Martínez Pería, María Soledadde la Torre, AugustoSchmukler, Sergio L.2012-05-222012-05-222008-12https://hdl.handle.net/10986/6306This paper studies the factors banks perceive as drivers and obstacles to financing small and medium enterprises (SMEs), focusing on the role of competition and the institutional framework. Using a survey of banks in Argentina and Chile, the paper shows that, despite alleged differences in the countries' environments regarding rules, regulations, and ease of doing business, SMEs have become a strategic segment for most banks in both countries. In particular, banks have begun to target SMEs due to the significant competition in the corporate and retail sectors. They perceive the SMEs market as highly profitable, large, and with good prospects. Moreover, banks are developing coping mechanisms to overcome the particular institutional obstacles present in each country and to compete for SMEs. Banks' interest in SMEs is not based on government programs, yet policy action might help reduce the cost of providing financing, especially long-term lending.CC BY 3.0 IGOACCESS TO BANKACCESS TO EXTERNAL FINANCEACCESS TO FINANCEACCESS TO FINANCINGACCESS TO INFORMATIONADVERTISEMENTSAMOUNT OF CREDITARBITRAGEARREARSASYMMETRIC INFORMATIONBALANCE SHEETSBANK CREDITBANK DEPOSITSBANK EXPOSUREBANK FINANCINGBANK INVOLVEMENTBANK LENDINGBANK LOANSBANK POLICYBANK SERVICESBANKING MARKETBANKING SYSTEMBANKING SYSTEMSBANKRUPTCYBANKRUPTCY PROCEDURESBANKSBENEFICIARIESBIDSBINDING CONSTRAINTBUSINESS ACTIVITYCAPITAL INVESTMENTSCAPITAL LOANSCAPITAL MARKETSCASH FLOWSCENTRAL BANKCENTRAL BANKSCOLLATERALCOLLATERAL REQUIREMENTCOLLATERAL REQUIREMENTSCOMMERCIAL BANKSCOMMERCIAL LOANSCONFIDENCE IN BANKSCONSOLIDATIONCONSUMERCONSUMERSCONTRACT ENFORCEMENTCONTRIBUTIONCONTRIBUTIONSCOOPERATIVESCORPORATE BANKINGCORRUPTIONCREDIT BUREAUCREDIT BUREAUSCREDIT CARDSCREDIT GUARANTEECREDIT GUARANTEESCREDIT LINECREDIT LINESCREDIT MARKETCREDIT POLICYCREDIT RISKCUSTOMER SERVICEDEBTDEBT DEFAULTDEBT PAYMENTSDEBT RESTRUCTURINGDEBTORSDEBTSDEFAULT RATESDEMAND FOR CREDITDEPOSITDEPOSITSDEVELOPING COUNTRIESDEVELOPMENT BANKDOCUMENTATION REQUIREMENTSDOMESTIC BANKDOMESTIC BANKSDOMESTIC CURRENCYECONOMIC ACTIVITYECONOMIC CRISISECONOMICSEMERGING ECONOMIESEMERGING MARKETEMPLOYMENTENTREPRENEURSEXCESS LIQUIDITYEXCHANGE RATEEXCLUSIONEXTERNAL FINANCINGFACTORINGFILING FOR BANKRUPTCYFINANCESFINANCIAL ACCESSFINANCIAL CONSTRAINTSFINANCIAL CONTRACTSFINANCIAL DEVELOPMENTFINANCIAL INFORMATIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL REFORMSFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STATEMENTSFINANCIAL SYSTEMFINANCIAL TRANSACTIONFINANCIAL TRANSACTIONSFINANCING OBSTACLESFIXED COSTSFIXED RATESFLOW OF INFORMATIONFOREIGN BANKSFOREIGN EXCHANGEFOREIGN EXCHANGE TRANSACTIONSFOREIGN INVESTORSFUTURE GROWTHGREATER ACCESSGUARANTEE FUNDGUARANTEE FUNDSGUARANTEE SCHEMESHOUSEHOLDSINCOMEINCOME SOURCESINFORMATION GAPINSTITUTIONAL DEVELOPMENTINSTRUMENTINSURANCEINSURANCE PRODUCTSINTEREST RATEINTEREST RATE CEILINGINTEREST RATE RISKINTEREST RATESINTEREST RATES ON LOANSINTERNATIONAL BANKINTERNATIONAL BANKSINTERNATIONAL FINANCEINVESTMENT LOANSINVESTMENT PROJECTSJUDICIAL PROCESSESLACK OF ACCESSLARGE BANKSLARGE COMPANIESLARGE COMPANYLARGE FIRMSLAWSLEGAL CONSTRAINTSLEGAL REFORMLEGAL RIGHTSLINES OF CREDITLIQUID ASSETSLOANLOAN AMOUNTLOAN MARKETLOAN PORTFOLIOSLONG-TERM LENDINGLONG-TERM LOANSLOW INTEREST RATESMACROECONOMIC ENVIRONMENTMACROECONOMIC STABILITYMACROECONOMIC UNCERTAINTYMARKET ENVIRONMENTMARKET SHAREMARKET STRUCTUREMEDIUM ENTERPRISESMICRO ENTERPRISESMORAL HAZARDMORTGAGESNATIONAL GUARANTEENEW MARKETSNON-PERFORMING LOANSOUTREACHOVERDRAFTSPARTIAL CREDITPAYMENT OBLIGATIONPAYMENTS IN ADVANCEPENSIONPERSONAL GUARANTEEPOLITICAL ECONOMYPORTFOLIOPRIVATE BANKSPRIVATE SECTOR LOANSPROFITABILITYPROMISSORY NOTESPROPERTY RIGHTSPROTECTION OF INVESTORSPUBLIC BANKSPUBLIC CREDITPUBLIC FUNDQUESTIONNAIRERECEIPTRECEIPTSRECESSIONREGIONAL BANKSRELATIONSHIP LENDINGRESEARCH ASSISTANCERISK MANAGEMENTRISK TAKINGRULE OF LAWSALESALESSCHOLARSHIPSSECURITIESSELF-FINANCINGSHAREHOLDERSSMALL BANKSSMALL BUSINESSSMALL ENTERPRISESMALL ENTERPRISESSMALL ENTREPRENEURSTAXTAX REDUCTIONSTECHNICAL ASSISTANCETERM CREDITTERMS OF LOANSTOTAL DEBTTRADE FINANCINGTRAINING PROGRAMSTRANSACTIONTRANSPARENCYUNFAIR COMPETITIONUNSECURED LOANSVARIABLE RATESVARIABLE-RATE LOANSWORKING CAPITALWorld Bank10.1596/1813-9450-4788