Geginat, Carolin
Does IDA Engage in Defensive Lending ? Geginat, Carolin [electronic resource] / Geginat, Carolin - Washington, D.C., The World Bank, 2007 - 1 online resource (30 p.) - Policy research working papers. World Bank e-Library. .
Multilateral development banks are frequently accused of "defensive lending," the practice of extending new loans purely in order to ensure that existing loans are repaid. This paper empirically examine this hypothesis using data on lending by and repayments to the International Development Association (IDA), which is the largest provider of concessional development loans to low-income countries. The authors argue that key institutional features of IDA both (i) potentially create incentives for defensive lending, and (ii) enable particularly sharp tests of the defensive lending hypothesis. The authors find that there is a surprisingly robust partial correlation between disbursements on new IDA loans and repayments on existing loans. However, a closer look at the evidence suggests that defensive lending is unlikely to be a major explanation for this partial correlation.
10.1596/1813-9450-4328
Access to Finance
Bankruptcy and Resolution of Financial Distress
Banks and Banking Reform
Creditors
Debt
Debt issues
Debt Markets
Debts
Disbursements
Economic Theory and Research
External debt
Finance and Financial Sector Development
International Bank
International Development
Macroeconomics and Economic Growth
Non-performing loans
Repayments
Does IDA Engage in Defensive Lending ? Geginat, Carolin [electronic resource] / Geginat, Carolin - Washington, D.C., The World Bank, 2007 - 1 online resource (30 p.) - Policy research working papers. World Bank e-Library. .
Multilateral development banks are frequently accused of "defensive lending," the practice of extending new loans purely in order to ensure that existing loans are repaid. This paper empirically examine this hypothesis using data on lending by and repayments to the International Development Association (IDA), which is the largest provider of concessional development loans to low-income countries. The authors argue that key institutional features of IDA both (i) potentially create incentives for defensive lending, and (ii) enable particularly sharp tests of the defensive lending hypothesis. The authors find that there is a surprisingly robust partial correlation between disbursements on new IDA loans and repayments on existing loans. However, a closer look at the evidence suggests that defensive lending is unlikely to be a major explanation for this partial correlation.
10.1596/1813-9450-4328
Access to Finance
Bankruptcy and Resolution of Financial Distress
Banks and Banking Reform
Creditors
Debt
Debt issues
Debt Markets
Debts
Disbursements
Economic Theory and Research
External debt
Finance and Financial Sector Development
International Bank
International Development
Macroeconomics and Economic Growth
Non-performing loans
Repayments