IMF Working Papers

Understanding the Use of Long-term Finance in Developing Economies

By Maria Soledad Martinez Peria, Sergio L. Schmukler

April 26, 2017

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Maria Soledad Martinez Peria, and Sergio L. Schmukler Understanding the Use of Long-term Finance in Developing Economies, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.

Subject: Bank credit, Banking, Capital markets, Expenditure, Financial institutions, Financial markets, Insurance companies, Loans, Mutual funds, Pension spending

Keywords: Banks, Bond markets, Capital market, Capital market capitalization, Capital markets, Central America, Economies stock market capitalization, Europe, Finance, Finance shift, Financial crises, Financial intermediaries, Firm financing, Global, Income economy, Institutional investor, Institutional investors, Insurance companies, Investment finance program, Investment horizons, Issuance maturity, Loans, Long-term debt, Long-term finance, Market, Market failure, Maturity, Mutual funds, Pension spending, Saving needs, Short-term debt, Stock market capitalization, WP

Publication Details

  • Pages:

    28

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/096

  • Stock No:

    WPIEA2017096

  • ISBN:

    9781475595758

  • ISSN:

    1018-5941

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