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Using data from a World Bank survey carried out in Bangladesh during the period 1991-1992, we compare the impact of micro…nance programs and other types of credit on agricultural investment. After controlling for several measurable determinants of credit agreements, such as interest rates and collateral, estimates still show that micro…nance programs are more likely to increase variable input expenditure than informal and bank credit are able to do. This provides evidence that micro-…nance incentive devices (joint responsibility, peer monitoring, social sanctions, future credit denial in case of default, etc.), perhaps together with other services associated with programs, are e¤ective in order to promote a productive use of funds.

In 2005 the European Commission adopted the Third Directive on Anti-Money Laundering (AML), which was to be implemented into national laws at the latest by December 2007. The key feature that characterizes the Third Directive is the idea that the regulatory framework should be risk-based (RBA). The aim of this regulation is to elicit a high level of outcome in terms of AML effectiveness from self-interested financial institutions (FIs) who hold private information. In this paper we study how to increase the effectiveness of AML rules, using a principal-agent framework to describe the regulatory setting in which an RBA is applied. We focus on incentive problems arising in a three-layer hierarchy, which includes public authorities (policymakers), financial institutions, and supervisors.

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Using data at the bank–firm level collected through the 9th UniCredit Survey conducted in 2012 on a large sample of small businesses, we investigate the extent to which a large international bank offers better credit conditions to enterprises that use ICT more extensively. The results, which are robust to selection and endogeneity issues, show that banks tend to grant increasing volumes of credit to such enterprises. We interpret this evidence as the ceteris paribus effect of ICT adoption by small businesses on the quality of information transmitted to banks. Another possible interpretation is that banks consider ICT adoption as a signal of firms’ willingness to innovate. We also discuss implications concerning the key role that technology plays in changing the ‘arm’s length’ versus ‘relationship’ lending paradigms

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This paper investigates the relationship between bank ownership and efficiency before and after the 2008–2009 Global Financial Crisis. Using a sample of 58 Indian commercial banks from 2005 to 2017, we examine the interconnection between these factors in a dynamic data envelopment analysis (DEA) framework. We use an innovative modeling strategy based on a two‐stage dynamic DEA framework. The first stage employs the Dynamic Slack‐Based Measure model to measure bank efficiency, explicitly considering the effects of desirable and undesirable carry‐overs between consecutive periods. In a second stage, we perform a regression of the efficiency scores on bank ownership types and several other contextual factors, while also accounting for the presence of endogenous relationships between the variables involved. Our results show that foreign banks outperform their domestic competitors, with bank size and profitability being the main drivers. We also find that while foreign and state‐owned banks were more efficient than their rivals during the Global Financial Crisis, private banks recovered quickly, reaching the efficiency standards of state‐owned banks by 2017. The latter faced a prolonged decrease in efficiency, gradually losing their initial advantage over their private domestic counterparts. Our results are robust to alternative regression specifications, especially those aimed at addressing potential endogeneity issues. The applied methodology and the findings of our research should be of interest to scholars, bank managers, and policymakers. The latter, in particular, should be concerned about the medium‐term effects of reforms that unevenly affect banks with different ownership structures, especially in terms of bank resilience to aggregate shocks.