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Borrowing Costs and The Role of Multilateral Development Banks: Evidence from Cross-Border Syndicated Bank Lending
Author:
Daniel Gurara null

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Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
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Miguel Sarmiento null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2018: Issue 263
Language:
English
Publication Date:
07 Dec 2018
DOI:
https://doi.org/10.5089/9781484386200.001
ISBN:
9781484386200
ISSN:
1018-5941
Pages:
44
Keywords:
WP; loan pricing; term loan; loan term; MDBs' participation; loan maturity; Financial inclusion; microfinance; loan expansion program; credit reference bureau; Loans; Syndicated loans; Multilateral development institutions; Public sector; Bank credit; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Cross-border bank lending is a growing source of external finance in developing countries and could play a key role for infrastructure financing. This paper looks at the role of multilateral development banks (MDBs) on the terms of syndicated loan deals, focusing on loan pricing. The results show that MDBs' participation is associated with higher borrowing costs and longer maturities---signaling a greater willingness to finance high risk projects which may not be financed by the private sector---but it is also associated with lower spreads for riskier borrowers. Overall, our findings suggest that MDBs could crowd in private investment in developing countries through risk mitigation.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund