Scientific Papers


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ISSN: 2306-3483 (Online), 2071-8330 (Print)

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Determinants of loan maturity in small business lending

Vol. 10, No 2, 2017


Ashiqur Rahman


Tomas Bata University in Zlin,
Zlin, Czech Republic



Determinants of loan maturity in small business lending


Zoltan Rozsa


School of Economics and Management in Public Administration in Bratislava,
Bratislava, Slovak Republic




Ludmila Kozubikova


Tomas Bata University in Zlin,
Zlin, Czech Republic


Martin Cepel


LIGS University LLC,
Honolulu, Hawaii, USA




Abstract. This paper investigates the determinants of loan maturity of small and medium enterprises (SMEs) in the context of Visegrad countries: Czech Republic, Slovak Republic, Poland, and Hungary. The data of instead of for this paper was obtained from the Business Environment and Enterprise Performance Survey (BEEPS), which is a joint project of the European Bank for Reconstruction and Development and the World Bank. By using a binary logistic model, we have found that loan maturity is shorter for older and mature firms, firms owned by female and firms experiencing a shortage of liquidity. At the same time, we have also found that firms having concentrated ownership structure and more tangible assets can borrow for a longer period. In addition to that, we have found evidence that loan maturity is longer for the firms located closer to a bank branch. We also provide empirical support for the assumption that bank low competition is associated with longer maturity. From the obtained results, we may recommend SMEs to borrow from banks that are within their vicinity since this may increase the maturity of loans. Policy makers are recommended to implement policies so that to alleviate gender-related discrimination and take initiatives to moderate the level of competition at this market.


Received: November, 2016

1st Revision: January, 2017

Accepted: May, 2017


DOI: 10.14254/2071-8330.2017/10-2/7


JEL Classification:G21, G32, L26 

Keywords: loan maturity, asymmetric information, female, distance, concentration, collateral, small and medium enterprises