Loan Repayment Performance in Community Development Finance Institutions in the UK

This paper identifies the key institutional factors that influence loan loss rates in Community Development Finance Institutions in the UK. Traditional bank credit assessment puts the blame of poor loan performance largely on the borrower. This is the first study of its kind to examine institutional...

Full description

Saved in:
Bibliographic Details
Published in:Small business economics 2005-11, Vol.25 (4), p.319-332
Main Authors: Derban, William K., Binner, Jane M., Mullineux, Andy
Format: Article
Language:English
Subjects:
Access to credit
Bank credit
Bank loans
Community
Community development
Community development banks
Credit
Credit market
Credit risk
Debt
Debt repayment
Development programmes
Economic development
Finance
Financial loss
Lenders
Loan losses
Loan rates
Loans
Low income groups
Regional studies
Small business
Small business loans
Social exclusion
Studies
United Kingdom
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper identifies the key institutional factors that influence loan loss rates in Community Development Finance Institutions in the UK. Traditional bank credit assessment puts the blame of poor loan performance largely on the borrower. This is the first study of its kind to examine institutional characteristics of 16 CDFIs in the UK and assess their influence on the loan loss rates. The results show that 8 out of the 13 institutional characteristics examined significantly influence loan repayment performance. Although a vast body of literature supports the view that borrower characteristics are highly influential, our results provide strong evidence to show that institutional characteristics are equally important and both factors need to be taken into account if loan repayment performance is to be improved.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-004-6483-y