Loan managers’ trust and credit access for SMEs

Research on relationship lending pays only marginal attention to the role of loan managers' trust in the managers of SMEs. Trust literature suggests that trust reduces agency costs. Thus, trust is expected to be positively related to the amount of short-term credit granted and negatively related to SMEs' risk of being credit constrained. Results from six banks characterised by a German culture and three banks characterised by an Italian culture suggest that this is indeed the case: SMEs that enjoy a high level of trust from loan managers obtain more credit and are less credit constrained.