Financial institutions (banks) lend money to small businesses and also make home mortgage loans. The bank employees
Question:
Financial institutions (banks) lend money to small businesses and also make home mortgage loans. The bank employees with direct contact with the small business owners typically have broader decision rights: they make the decision as to whether or not to lend to the small business owners. The bank employees with direct contact with prospective home loan applicants advise the customer about different contract options and put together the loan application forms. The mortgage loan sales person has no decision rights: the loans are passed up the firm to an individual that evaluates all the loan applications from the sales force.
Explain why the loan approval process is decentralized in the case of small business loans and not in the case of home mortgage loans.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr