Staten, Michael E; Gilley, Otis W; Umbeck, John - In: Economic Inquiry 28 (1990) 3, pp. 508-29
This paper explains indirect lending as a strategy for reducing a bank's cost of screening borrowers. Commercial banks appear to "ration" credit by rejecting some direct loan applicants, although they accept higher-risk borrowers who apply for loans indirectly through retailers. However, the...