Relationship lending, risk and bank business strategies: an empirical study of Moroccan SMEs
The objective in this paper is to investigate the commercial strategies of credit availability that Moroccan banks adopt to deal with the different types of SMEs risk in a relationship lending. Based on contractual data from a sample of 512 SMEs, empirical tests using a logit model allowed us to conclude that accelerated disengagement is triggered for SMEs with higher risk, shorter duration of the relationship lending and those who have more than one partner bank. Moroccan banks prefer friendly solutions by consolidating all the credits or by granting medium – and long-term restructuring credit in the perspective of favorable risk evolution for this category of SMEs. However, for low-risk SMEs, banks’ commercial strategy varies from maintaining lines of credit to renewing and increasing these lines, especially when the duration of the relationship lending is long and the number of banks is reduced to a single bank or a main bank. The longer the duration of the lending relationship and the greater commitment reciprocity, the more credit availability is made for those low-risk SMEs.