Bank Lending to Small and Medium Sized Business: Evidence from Russia

  •  Oleg Gennadievich Korolev    


Access of small- and medium-sized enterprises (SMEs) to external financing sources is defined in many respects by the tendencies of bank system development in different countries as well as by the possibilities and interest of commercial banks to make loans to creditworthy small- and medium-sized borrowers. In the present paper, we suggest that even in post-crisis conditions, this is small- and medium-sized Russian banks, rather than large banking institutions, that tend to issue loans to small and medium-sized enterprises. Analysis of the data available from the Russian banks gives evidence that with the growth of the bank size and with widening of the scope of the bank’s activity, bank’s lending to legal entities, in particular, to SMEs and to individual entrepreneurs, tends to become more intense. At the same time, the share of lending to SMEs and individual entrepreneurs in the legal entities loan portfolio tends to decrease.

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