Argentina 2002-2005: Use of Bank Financing, Long-Term Credit and Their Impact on Companies’ Microeconomic Performance
The starting point of any policy decision tending to promote long-term bank financing is that it is scarce and that its provision is important for economic development. In the case of Argentina, in December 2005, long-term bank financing accounted for approximately 8.85% of GDP for total loans and 5.10% of GDP for loans to the non-financial private sector, if long-term means periods longer than 12 months; in the case of terms of over 24 months, the percentages were 7.16% of GDP and 3.76% of GDP, respectively. If, as reference information, we take into account that Gross Domestic Fixed Investment and the investment in durable equipment stood at around 21.46% and 8.49% of GDP, respectively, it is clear that the share of long-term bank financing is, at best, limited. If we focus on the depth of the Argentine financial system, the evidence is not promising, either. Out of a total of 150,960 loans to companies granted by financial entities regulated and supervised by the Central Bank of Argentina as of December 2005, only 16,030 (approximately 10.6%) had maturity terms over 12 months and only 8,733 (around 5.8%) had maturities over 24 months. Out of the 73,329 companies that received loans, only 12,126 (approximately 16.5%) had maturity terms over one year, while only 7,084 (around 9.7%) had terms exceeding two years. The purpose of our paper is to study, as of December 2005, if there are restrictions in the use of long-term financing among companies in Argentina, and then see how restrictions depend on the observable characteristics of the relevant economic agents and of the loans provided; as a result, we also analyze how the use of bank financing in general and long-term loans in particular affected companies’ microeconomic performance in the period 2002-2005. The paper concludes that, in Argentina, there is a starting point to promote long-term financing, since we could document the shortage of long-term loans and how important they are for economic development.
|Date of creation:||Apr 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Reconquista 266 - C1003ABF - Buenos Aires|
Phone: (54-11) 4348-3582
Fax: (54-11) 4348-3794
Web page: http://www.bcra.gov.ar
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bcr:wpaper:200834. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Federico Grillo)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.