Browsing by Subject "Credit provision"

Now showing 1 - 2 of 2

Open Access
Political connection, bank credits and growth: evidence from Turkey
(Wiley-Blackwell Publishing, 2011) Onder, Z.; Ozyildirim, S.
The pervasive existence of government-owned banks in emerging economies is often justified by their provision of access to credit in remote and underdeveloped regions that are ignored by private banks. This paper analyses whether credits provided by government-owned and private banks have a significant role in regional growth and whether this role changes in politically connected areas in Turkey. Our findings imply that private banks significantly improve the economic well-being in all Turkish provinces regardless of their development level or their political connection with the ruling party. However, credits by government-owned banks are found to be positively related to the per capita growth rate only in the less developed provinces that are advocates of the ruling political party and also developed but not politically connected provinces. These results suggest that government-owned bank credits, as implied by the political view, are used for funding politically desirable projects or politically connected borrowers.
Open Access
Social networks and credit access in Indonesia
(Pergamon Press, 2004) Okten, C.; Osili, U. O.
In this paper, we investigate how family and community networks affect an individual's access to credit institutions using new data from the Indonesia Family Life Surveys. Our theoretical framework emphasizes the family and community's role in providing information, thus lowering the search costs of the borrower and monitoring and enforcement costs for the lender. From our empirical results, community and family networks are important in knowing a place to borrow, as well as for loan approval. Consistent with an information-based explanation of networks, family and community networks have a larger impact on credit awareness of new credit institutions with a lower impact on awareness of established credit sources. Interestingly, we find that women benefit from participating in community networks more than men. There is no evidence that the rich benefit from community networks more than the poor. Our results on the benefits from participation in the community network are robust to the inclusion of community fixed effects. © 2004 Elsevier Ltd. All rights reserved.