Credit rationing with heterogeneous borrowers in transition economies: evidence from Slovakia

This article investigates the macroeconomic importance of credit rationing and whether banks use characteristics such as ownership structure and institutional type of borrowers in order to regulate the risk of loaned funds. To test this, monthly data for 2000-02, extracted from the National Bank of Slovakia monetary review, were used. The article finds that credit rationing was not present during the period analysed, implying that the credit market can be approximated with a typical supply and demand relationship. The second finding of the article is that intermediaries use the ownership type and institutional form of borrowers to regulate risk.