The Development Research Group at World Bank organized a talk on Bank lending for inclusive growth on November 17th, 2020 with speakers Claudia Ruiz-Ortega and Mario Guadamillas.
You can watch the session recording HERE.
Bank lending is a key driver of economic growth. However, large inefficiencies remain—particularly in developing countries—due to barriers that limit the flow of funds towards productive borrowers.
In this Policy Research, Claudia Ruiz-Ortega shares how access to novel datasets from banks, credit bureaus, and credit registries can help us understand the dynamics of bank lending, as well as the intended (and unintended) effects of public policies affecting banks.
Drawing on research in Mexico and Peru, the publication illustrates cases in which lenders lack incentives to allocate credit to productive borrowers or advance financial inclusion among SMEs. Highlighting the case of earmarked credit in Brazil, the document provides new insights on the strategies that banks adopt when distributing government-subsidized loans across firms.