The Operational Efficiency of the Federal Business Development Bank in Financing Small Businesses

Abstract

Although the Canadian FBDB is similar to the U.S. SBA, it provides loans directly to small Canadian businesses. Thus, this paper compares the relative operational efficiency of the public-sector FBDB and Roynat, its major private-sector counterpart. The study concludes that the FBDB operates as efficiently as Roynat, when the relative sizes and the natures of the clienteles of both institutions are accounted for. The study has implications for those countries (such as the U.S.), which predominantly rely on private-sector delivery systems to financially assist small businesses.