Loan Officers and Relationship Lending to SMEs


Hirofumi Uchida

Gregory F. Udell

Nobuyoshi Yamori

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2008-17 | July 1, 2008

Previous research suggests that loan officers play a critical role in relationship lending by producing soft information about SMEs. For the first time, we empirically confirm this hypothesis. We also examine whether the role of loan officers differs from small to large banks as predicted by Stein (2002). While we find that small banks produce more soft information, the capacity and manner in which loan officers produce soft information does not seem to differ between large and small banks. This suggests that, although large banks may produce more soft information, they likely tend to concentrate their resources on transactions lending.

Article Citation

Udell, Gregory F., Hirofumi Uchida, and Nobuyoshi Yamori. 2008. “Loan Officers and Relationship Lending to SMEs,” Federal Reserve Bank of San Francisco Working Paper 2008-17. Available at