Banking competition, good or bad? The case of promoting micro and small enterprise finance in Kazakhstan

$54.97 plus tax (Refund Policy)

Buy Article:

Abstract:

Competition is claimed to be beneficial in development projects promoting micro and small enterprise finance although there are still doubts as to whether these loans can be developed into a profitable business. Our research sheds new light on the question of how many MSE banking units should optimally be created and supported in a certain region. We employ a unique data set from the European Bank for Reconstruction and Development for Kazakhstan, and investigate which strategy contributes more to the overall success of the programme: a strategy of setting up several competing banks or a strategy of establishing regional monopolies. 'Competition is the most important principle on which our strategy is based. As in any other market, effective competition provides incentives for banks to offer market-based and demand-oriented financial services. Competition encourages the development of better products and services at lower cost.' (Matthaus-Maier and von Pischke, 2004, p. 1).

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840701720820

Affiliations: 1: German Institute for Economic Research (DIW) Berlin, D-14195 Berlin, Germany 2: Ruprecht-Karls-Universitat Heidelberg, Alfred-Weber-Institut, D-69117 Heidelberg, Germany

Publication date: March 1, 2010

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more