Effects of Small Loans on Bank and Small Business Growth
Since 1980, the number of commercial banks has dropped from 14,400 to 4,600. Given the decrease in commercial banking options, it is important to understand the long-term trends of banking industry dynamics by size of bank, as well as the impact of small business lending on bank growth and small business success. This report finds a decline in bank dynamism with falling new bank entry rates and increasing exit rates for small banks. Additionally, the authors found that small business loans are positively associated with the growth of small banks and small business success. Read “Effects of Small Loans on Bank and Small Business Growth” to learn more.