Cooperative versus Commercial Banks in Greece: A Comparative Analysis of Credit Policy

This study compares the credit policies of Greek cooperative and commercial banks using firm-level balance-sheet data for more than 20,000 companies drawn from the ICAP database over the period 2014–2016. We examine how lending differs by sector, firm size, and financial robustness. Descriptive evidence shows that cooperative banks primarily serve small and medium-sized enterprises (SMEs). We then estimate a logit model in which the dependent variable indicates whether a firm is financed exclusively by commercial banks, using financial ratios capturing coverage, activity, profitability, and liquidity. The results suggest that firms with stronger financial fundamentals—especially higher interest coverage—are more likely to be financed by commercial banks, while cooperative banks tend to serve financially weaker firms. These findings are consistent with the relationship-based role of cooperative banks during the crisis period in Greece.