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Vive la Différence: Social Banks and Reciprocity in the Credit Market

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Listed:
  • Simon Cornée

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Ariane Szafarz

Abstract

Social banks are financial intermediaries paying attention to non-economic (i.e. social, ethical, and environmental) criteria. This paper investigates the behavior of social banks in the European credit market. We use a unique hand-collected dataset on 389 business loans granted by a French social bank. Our results show that the social bank charges below-market interest rates for viable social projects. Moreover, regardless of their creditworthiness, motivated borrowers respond to advantageous credit conditions by significantly lowering their probability of default. We interpret this outcome as the first evidence of reciprocity in the credit market.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Simon Cornée & Ariane Szafarz, 2014. "Vive la Différence: Social Banks and Reciprocity in the Credit Market," Post-Print hal-02944436, HAL.
    • Handle: RePEc:hal:journl:hal-02944436
    DOI: 10.1007/s10551-013-1922-9
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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