Improving Access to Finance for Entrepreneurs in Developing Countries

Project Active from to Firms and Entrepreneurship

One of the most important issues in developing countries is how to finance SMEs. Although microcredit and new forms of financial inclusion are increasingly prominent in the literature, much empirical evidence shows that banks are still the main financial actors. This study focuses on loan officers’ risk propensity and finds that, among other conclusions, that performance incentives affect lending decisions. The paper is written by Shawn Cole (Harvard Business School), Martin Kanz (Harvard University) and Leora Klapper (The World Bank).