Bank provisioning and microcredit
Temas de Estabilidad Financiera ; No. 49
Fecha de publicación
2010-09-01Fecha última actualización
2010-09Idioma del documento
engMétricas alternativas
Las opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.
Abstract
In this paper we develop a banking model to study the traditional credit and the microcredit markets. We suppose a monopolistic traditional bank that specializes in screening potential debtors based in their risk profile and a microcredit bank that focus on monitoring the riskier profile customers. The model is calibrated with Colombian financial data. The results show when banking provisioning depend only on the screening level, a significant portion of the risky debtors are left out of the financial system and the microcredit bank would not operate in certain market conditions. Nonetheless, when we consider provisions that include monitoring considerations, the microcredit bank would be profitable for the different debtor risk profiles, and its optimal monitoring level is higher in comparison with the ones chosen by the traditional bank. Keywords: Bank Provisioning, Microcredit banking model, Regulation and risk profiles, debtor screening, debtor monitoring.
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https://repositorio.banrep.gov.co/handle/20.500.12134/2091https://hdl.handle.net/20.500.12134/2091
https://doi.org/10.32468/tef.49
https://ideas.repec.org/p/bdr/temest/049.html
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Esta obra está bajo licencia internacional Creative Commons Reconocimiento-NoComercial 4.0.Este documento ha sido depositado por parte de el(los) autor(es) bajo la siguiente constancia de depósito