Credit Rationing by Loan Size in Commercial Loan Markets
FRB Richmond Economic Review, Vol. 78, No. 3, May/June 1992, pp. 3-8
6 Pages Posted: 7 Nov 2012
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.
Suggested Citation: Suggested Citation
Schreft, Stacey L. and Villamil, Anne P., Credit Rationing by Loan Size in Commercial Loan Markets. FRB Richmond Economic Review, Vol. 78, No. 3, May/June 1992, pp. 3-8, Available at SSRN: https://ssrn.com/abstract=2125124
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