Vietnam - Netherlands Programme

The thesis examines empirically the role of collateral and lending relationships in access to lines credit of small and medium-sized enterprises having lines of credit. The data originates from the survey of SMEs in Ho Chi Minh City having lines of credit in a state-owner Commercial Bank. The analysis explores the relationship between the lines of credit and four categorical variables: collateral, relationship lending, firm quality, and firm characteristic.

 

The main finding is that collateral and lending relationships has a positive effective to lines of credit. Especially, personal relationship is one of the proxy variables for lending relationships. The results show that personal relation has positive effective to lines of credit, and moreover, the firm with high assets turnover (Saleta) and personal relationships will receive higher volumes of lines of credit than firms with high Saleta, but without a personal relationship.