Determinants of Bank Loan Availability: Evidence From Pakistani Non-Financial Firms

Jaleel Ahmed
Jaweria Khalid
JEL codes: 
G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages, G30 - General.
In this research paper we have investigated the key factors which make it easier for non-financial firms to arrange financing from commercial banks. We have collected the data from the year 2001 to 2011 from 220 non-financial firms in Pakistan. We have used two measures of firm-bank relationship. First, if a non-financial firm has a board of director who is at the same time board of director of a commercial bank. Second, if a commercial bank has an equity stake in a non-financial firm. After using Fixed Effect model we have found that firm-bank relationships always matter for arranging bank loan for non-financial firms in Pakistan.
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