Branch management and firm credit: Evidence from Ethiopia

Working paper Firms and Trade

In order to understand the functioning of banks and firm credit in low-income countries, we collect novel datasets on the management practices and credit conditions from the universe of bank branches in Ethiopia. Our preliminary findings indicate that branches with strong practices operate over longer geographic distances and supply more local credit. We also observe that loan characteristics correlate with good branch management through longer maturities, lower collateral requirements and reduced default rates.