Relationship lending: A source of support or a means of exploitation?

Using a dataset from the State Bank of Pakistan containing each and every commercial loan generated in economy 2006 to 2013, we find that, on average, longer relationship length is associated with lower risk premiums but higher collateral requirements. However, further examination paints far more complex picture. The impact varies substantially type lender, as well borrower. We argue that conflicting empirical findings lending are result using datasets limited certain types borrowers or financial institutions.