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Bank financing to small and medium-sized enterprises (SMEs) in Colombia

Author

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  • Stephanou, Constantinos
  • Rodriguez, Camila

Abstract

The objective of this paper is to shed light on current trends and policy challenges in the financing of small- and medium-sized enterprises (SMEs) by banks in Colombia. The paper is motivated by the well-documented financing gap for SMEs, whose causes are complex and multi-dimensional. Based on data collection and interviews with the authorities, a representative sample of banks, and other relevant entities, the authors analyze the evolution and characteristics of this market in recent years. Bank financing to SMEs is becoming a strategic segment for Colombian credit institutions. The current business and risk management models for SME lending are still relatively underdeveloped, but greater sophistication is expected as the market matures. Important institutional and policy constraints to SME lending remain, but are not yet binding. In order to address these constraints before they"begin to bite", the authors identify and describe a potential policy reform agenda.

Suggested Citation

  • Stephanou, Constantinos & Rodriguez, Camila, 2008. "Bank financing to small and medium-sized enterprises (SMEs) in Colombia," Policy Research Working Paper Series 4481, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4481
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    References listed on IDEAS

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    Cited by:

    1. de la Torre, Augusto & Martínez Pería, María Soledad & Schmukler, Sergio L., 2010. "Bank involvement with SMEs: Beyond relationship lending," Journal of Banking & Finance, Elsevier, vol. 34(9), pages 2280-2293, September.
    2. Ardic, Oya Pinar & Mylenko, Nataliya & Saltane, Valentina, 2011. "Small and medium enterprises : a cross-country analysis with a new data set," Policy Research Working Paper Series 5538, The World Bank.
    3. Beck, Thorsten & Demirguc-Kunt, Asli & Soledad Martinez Peria, Maria, 2008. "Bank Financing for SMEs around the World: Drivers, Obstacles, Business Models, and Lending Practices," Policy Research Working Paper Series 4785, The World Bank.
    4. Berg, Gunhild & Fuchs, Michael, 2013. "Bank financing of SMEs in five Sub-Saharan African countries : the role of competition, innovation, and the government," Policy Research Working Paper Series 6563, The World Bank.
    5. Joanna Duda & Maciej Wozniak, 2018. "Bank policies towards SME sector in Poland and selected countries worldwide," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 19(1), pages 25-47.
    6. Thorsten Beck & Asli Demirgüç-Kunt & María Pería, 2011. "Bank Financing for SMEs: Evidence Across Countries and Bank Ownership Types," Journal of Financial Services Research, Springer;Western Finance Association, vol. 39(1), pages 35-54, April.
    7. Gacicio Pauline Wangechi & Gabriel Waweru, 2015. "Effects of Information on Loan Access: A Case of Small and Medium Enterprises in Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(6), pages 190-207, June.
    8. Reindolf Yao Nani Adzido & Emmanuel Kwame Ahiave & Victor Yao Kamasah & Vivian Akoto & Onesimus Kwashie Dorkpah, 2016. "Assessing Financial Openness and Access to Credit Facilities: The Case of Banks in Ho, Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 47-57, July.
    9. Michael Fuchs & Leonardo Iacovone & Thomas Jaeggi & Mark Napier & Roland Pearson & Giulia Pellegrini & Carolina Villegas Sanchez, 2011. "Financing Small and Medium Enterprises in the Republic of South Africa," World Bank Publications - Reports 12687, The World Bank Group.
    10. de la Torre, Augusto & Martinez Peria, Maria Soledad & Schmukler, Sergio L., 2008. "Drivers and obstacles to banking SMEs : the role of competition and the institutional framework," Policy Research Working Paper Series 4788, The World Bank.
    11. Augusto de la Torre & María Soledad Martínez Pería & María Mercedes Politi & Sergio L. Schmukler & Victoria Vanasco, 2008. "How Do Banks Serve SMEs? Business and Risk Management Models," World Bank Publications - Reports 12959, The World Bank Group.
    12. Saibal Ghosh, 2016. "Small business, lending relationships and crisis: evidence from Indian micro data," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 43(1), pages 1-15, March.
    13. Danny Turkson & Emmanuel A. Codjoe, 2021. "The Household Enterprise Sector in Ghana: Overview and Challenges," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(8), pages 140-140, July.
    14. Angela Roman, 2011. "The Access To Financing Of Small And Medium Enterprises In Romania And Implications Of Current Crisis," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 2011, pages 101-113, july.
    15. Alberto Huidobro, 2014. "Differences between loans granted by commercial and development banks: A cross-sectional analysis of interest rate margins," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 29(2), pages 163-224.

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    Keywords

    Access to Finance; Banks&Banking Reform; Debt Markets; Bankruptcy and Resolution of Financial Distress;
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