Abstract
This paper examines how the number of bank relationships affects bank lending to informationally opaque firms using a unique firm-level dataset of 996 small and medium-sized enterprises (SMEs). We find that an increase in the number of bank relationships can increase bank lending to informationally opaque SMEs. We also find that this increase is prominently observed in long-term loans. Furthermore, these loans can gradually increase with the number of bank relationships. These findings suggest that such a number can serve as a quality sign of informationally opaque SMEs and increase bank lending to them.
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