Accompanying the recent credit market developments in Russia, banks have shifted their portfolios to a higher proportion of retail lending relative to commercial credit. This paper offers a microeconomic approach to explain this phenomenon, unsatisfactorily addressed in the literature. It focuses on the role of institutions in the rapid increase of individual lending. Using oblast level data from the Central Bank of Russia, it develops a model of lending decisions and uses time fixed effects to estimate the correlation between variations in institutional quality and increased loans to individuals.
Ollenburger, Katherine, "Banking on Uncertainty: The Effects of Institutional Quality on Commercial and Consumer Credit in Russian Regions" (2008). Economics Honors Projects. Paper 12.
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