Decomposition of Corporate Credit Growth Using Granular Data

Burova Anna, Karpov Danila, Koshelev Denis.

Applying a new method of decomposition of corporate credit growth, authors estimated what part of credit expansion in Russia in 2018–2021 was accounted for by companies that had experience in credit borrowing in the past. And what part was due to newcomers to the corporate bank loan market. Authors conclude that in absolute terms, the share of the loan portfolio attributable to companies that are new to the credit market (the extensive component of growth) is small. A fact that is not obvious at first glance and which authors confirm in the course of the study, is that their contribution to fluctuations in the growth rates of credit aggregates, on the contrary, is large. The fact is that companies with existing credit relationships (the intensive component of growth) borrow and repay comparable amounts. Thus, the net contribution of the intensive component to credit expansion is small. This result is motivating for deeper research in evaluating the access to credit and increasing financial inclusion in Russia.

Decomposition of Corporate Credit Growth Using Granular Data