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The Determinants of Loan Contracts to Business Firms: Empirical Evidence from a Private Bank in Vietnam

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  • Thi Thu Tra Pham
  • Robert Lensink

Abstract

This paper deals with loan contracting from a private bank in Vietnam. We focus on the main loan contract features that the bank uses in lending to business firms, namely loan maturity, collateral and loan interest rate. Based upon the simultaneous equation model of Dennis et al. (2000) and the bank's loan contracting policies, we examine the possible interdependency of the three different loan contract terms. Also, we try to determine which firm characteristics and exogenous factors are relevant for loan contracts.

Suggested Citation

  • Thi Thu Tra Pham & Robert Lensink, 2006. "The Determinants of Loan Contracts to Business Firms: Empirical Evidence from a Private Bank in Vietnam," WIDER Working Paper Series RP2006-86, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2006-86
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