{
  "title": "Monetary Policy in a Developing Country: Loan Applications and Real Effects",
  "publication": "IMF Working Papers, December 23, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/index.md",
  "summary": "The transmission of monetary policy to credit aggregates and the real economy can be impaired by weaknesses in the contracting environment, shallow financial markets, and a concentrated banking system.",
  "sections": [
    {
      "heading": "Study scope and data",
      "content": "- Country and period analyzed: Uganda during 2010–2014.\n- Data source: supervisory dataset of loan applications and granted loans.\n- Event focus: a short period during which the policy rate rose by 1,000 basis points and then came down by 1,200 basis points.\n- Authors: Charles Abuka, Ronnie K Alinda, Camelia Minoiu, José-Luis Peydró, Andrea F Presbitero.\n- Publication details:\n  - Publication type: IMF Working Paper No. 2015/270.\n  - Date: December 23, 2015.\n  - Pages: 36.\n  - Volume: 2015.\n  - Issue: 270.\n  - DOI: https://doi.org/10.5089/9781513529813.001\n  - ISBN: 9781513529813\n  - ISSN: 1018-5941\n  - Stock No: WPIEA2015270"
    },
    {
      "heading": "Main empirical findings",
      "content": "- Transmission impairment:\n  - Monetary policy transmission to credit aggregates and the real economy can be impaired by weaknesses in the contracting environment, shallow financial markets, and a concentrated banking system.\n- Bank lending channel evidence:\n  - An increase in interest rates reduces the supply of bank credit on both the extensive margin (fewer loans granted) and the intensive margin (smaller loan amounts).\n  - There is significant pass-through from policy interest rates to retail lending rates.\n- Bank balance sheet channel:\n  - A strong bank balance sheet channel is documented: the lending behavior of banks with high capital and liquidity is different from the lending behavior of banks with low capital and liquidity.\n- Real activity heterogeneity:\n  - The impact of monetary policy on real activity across districts depends on banking sector conditions.\n- Overall conclusion:\n  - Results indicate significant real effects of the bank lending channel in developing countries."
    },
    {
      "heading": "Key concepts and subjects covered",
      "content": "- Subject tags from the source:\n  - Asset and liability management\n  - Bank credit\n  - Banking\n  - Credit\n  - Financial institutions\n  - Financial statements\n  - Liquidity\n  - Loans\n  - Money\n  - Public financial management (PFM)\n- Keywords from the source:\n  - bank balance\n  - Bank balance sheet channel\n  - bank capital\n  - Bank credit\n  - Bank lending channel\n  - Credit\n  - demand shock\n  - Developing countries\n  - East Africa\n  - Financial statements\n  - lending rate\n  - Liquidity\n  - Loans\n  - market power\n  - Monetary policy transmission\n  - Sub-Saharan Africa\n  - WP"
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Monetary policy effectiveness:\n  - In environments with weak contracting frameworks, shallow financial markets, and concentrated banking systems, conventional monetary policy actions can significantly affect credit supply and real activity through the bank lending channel.\n- Role of bank balance sheets:\n  - Policymakers should consider bank capital and liquidity positions when assessing monetary policy transmission and potential real economy effects.\n- Geographic heterogeneity:\n  - Regional or district-level banking conditions can shape heterogeneous real effects of uniform monetary policy actions.\n\nSource: IMF Working Paper No. 2015/270, \"Monetary Policy in a Developing Country: Loan Applications and Real Effects\" (December 23, 2015).\n\n---\n\n Content in this bundle\n\n- wp15270\n  - wp15270 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp15270 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/bundle-manifest.json)",
    "Authors: Charles Abuka, Ronnie K Alinda, Camelia Minoiu, José-Luis Peydró, Andrea F Presbitero",
    "Published: December 23, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513529813.001",
    "Country and period analyzed: Uganda during 2010–2014.",
    "Data source: supervisory dataset of loan applications and granted loans.",
    "Event focus: a short period during which the policy rate rose by 1,000 basis points and then came down by 1,200 basis points.",
    "Authors: Charles Abuka, Ronnie K Alinda, Camelia Minoiu, José-Luis Peydró, Andrea F Presbitero.",
    "Publication details:",
    "Transmission impairment:",
    "Bank lending channel evidence:",
    "Bank balance sheet channel:",
    "Real activity heterogeneity:",
    "Overall conclusion:",
    "Subject tags from the source:",
    "Keywords from the source:",
    "Monetary policy effectiveness:",
    "Role of bank balance sheets:",
    "Geographic heterogeneity:",
    "**_wp15270**"
  ],
  "related": [
    {
      "title": "_wp15270",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2015/_wp15270.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2015/_wp15270.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2015/_wp15270.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/monetary-policy-in-a-developing-country-loan-applications-and-real-effects-43488/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T18:13:29.997Z"
}