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Banking Competition, Good or Bad?: The Case of Promoting Micro and Small Enterprise Finance in Kazakhstan

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  • Dorothea Schäfer
  • Boriss Siliverstovs
  • Eva Terberger

Abstract

Competition is claimed to be beneficial in development projects promoting micro and small enterprise finance although there are still some doubts whether these loans can be developed into a profitable business. Actually nothing is known about how many MSE banking units optimally should be created and supported in a certain region. Our research aims at shedding new light on this important issue in development finance. We employ a unique dataset from the Small Business Department of the European Bank for Reconstruction and Development for Kazakhstan, and investigate which strategy contributes more to the overall program's success: a strategy of building up several competing banking units targeted at MSE lending or a strategy of establishing regional monopolies.

Suggested Citation

  • Dorothea Schäfer & Boriss Siliverstovs & Eva Terberger, 2005. "Banking Competition, Good or Bad?: The Case of Promoting Micro and Small Enterprise Finance in Kazakhstan," Discussion Papers of DIW Berlin 479, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp479
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    1. repec:diw:diwwpp:dp1869 is not listed on IDEAS
    2. Yang Fuming & WeiLun Huang & Liu Xiaojing, 2022. "Micro- and small-sized enterprises’ willingness to borrow via internet financial services during coronavirus disease 2019," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 191-216, March.
    3. Christopher F. Baum & Caterina Forti Grazzini & Dorothea Schäfer, 2020. "Institutional Diversity in Domestic Banking Sectors and Bank Stability: A Cross-Country Study," Discussion Papers of DIW Berlin 1869, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    Development finance; Micro loans; Competition; Financial institution building;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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