Title: Credit Rationing by Loan Size in Commercial Loan Markets
Abstract: The authors present a theoretical model in which a profit-maximizing lender may ration credit to businesses by restricting loan size. Such credit rationing occurs despite the absence of differences across borrowers in default risk or loan administration costs. Moreover, the model predicts an interest rate-loan size pattern that matches that observed in U.S. commercial loan markets.
Publication Year: 2012
Publication Date: 2012-11-07
Language: en
Type: article
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Cited By Count: 1
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