Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92374
Authors: 
Neuberger, Doris
Räthke-Döppner, Solvig
Year of Publication: 
2014
Series/Report no.: 
Thünen-Series of Applied Economic Theory 134
Abstract: 
To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play a larger role in loan pricing than the entrepreneur's age. Banks do not seem to discriminate older borrowers by higher loan rates. We rather find statistical discrimination of younger borrowers because of their lower wealth. Single entrepreneurs obtain cheaper loans than married ones. Firms in peripheral regions with low population density are disadvantaged by higher loan rates compared to those in agglomerated regions.
Subjects: 
small business finance
savings banks
relationship lending
aging
demographic change
JEL: 
D14
E43
G21
J14
L26
Document Type: 
Working Paper

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