Is Small Beautiful? Financial Structure, Size and Access to Finance

Beck, T., Demirguc-Kunt, A. & Singer, D. (2013). Is Small Beautiful? Financial Structure, Size and Access to Finance. World Development, 52, pp. 19-33. doi: 10.1016/j.worlddev.2013.05.014

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Combining two unique data sets, this paper explores the relationship between financial structure and firms’ access to financial services. Specifically, it considers the importance of three different types of financial institutions: low-end financial institutions, specialized lenders, and banks. Two findings stand out. First, dominance of the financial system by banks is associated with lower use of financial services by firms of all sizes, while low-end financial institutions and specialized lenders seem particularly suited to ease access to finance in low-income countries. Second, there is no evidence that smaller institutions are better in providing access to finance

Item Type: Article
Additional Information: © 2013 World Bank. Published by Elsevier Ltd. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Uncontrolled Keywords: financial development, structure of financial sector, size of financial sector, access to finance, small and medium enterprises, developing countries
Divisions: Cass Business School > Faculty of Finance

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