PurposeThe purpose of this paper is threefold. The paper aims to explore and present empirical evidence of microeconomical perspective of credit rationing phenomenon with special emphasis on the small and medium‐sized enterprise (SME) sector in the Republic of Croatia. In addition, the intention of this paper is to discuss SMEs' (ir)relevance in economic recovery and growth. Thus, macroeconomical implications of credit rationing problem are indirectly underlined.Design/methodology/approachEmpirical analysis of credit rationing in the corporate bank loan market was carried out on a sample from the Croatian financial market which included data on approximately 4,300 small, medium‐sized and large companies in the period from the end of 2008 to the first quarter of 2010. Multiple linear regression model was developed in order to examine enterprise's size and borrowing costs nexus as well as borrowing costs' determinants. Descriptive statistics provided certain evidence on magnitude of credit rationing and pointed out different levels of interest rates after which credit rationing and credit discouraging appears for various sizes of enterprises.FindingsIn comparison to the large enterprises, SMEs continuously encounter higher borrowing costs, upon which this discrepancy enlarges in the aftermath and presence of financial crisis. Credit spread which is used as a proxy of borrowing costs is statistically significantly determined with enterprise's size, collateral and internal credit rating of a borrower, whereas enterprise's size evidenced the highest explanatory power. Descriptive statistics showed that market cleaning of the SMEs credit applications evolves on the level of higher interest rates.Practical implicationsThe paper recommends thorough reexamination of economic importance of SMEs in Croatia and calls upon more efficient support strategy and fund allocation. Precisely, government actions should stimulate more inclusive bank finance of creditworthy SMEs.Social implicationsThis paper should induce and actualize better understanding of pitfalls, blunders and potentials of SMEs in fostering economic growth. More specifically, conclusions should be helpful to policy makers, national prudential authorities and students of economics.Originality/valueInclusion of borrowing costs in the analysis that presents a cut‐off point of demand and supply driven credit rationing could be a useful method for future empirical research on credit rationing.

Banks are the most important …nancial intermediaries and major providers of institutionalized loan …nancing in the economic systems worldwide. Externalities of their activities a¤ ect the economy deeply. Therefore, regulation of their behavior is of utmost importance for the general public. In addition, national and supranational prudential authorities request various forms and extents of mandatory disclosure. Nevertheless, voluntary disclosure is being recognized by the banks as a mechanism of asymmetric expectations'reduction and con…dence enhancement of current and potential both shareholders and stakeholders. Upgrading information availability and updating its quality might be a useful way of reducing the probability of systemic banking crisis as well as a useful tool for improving market discipline. However, the causes and consequences of banks' disclosure of accounting and other information are still challengeable issues in …nan-cial literature. In that regard, the purpose of the paper is to explore the determinants of Croatian banks' online disclosure of …nancial information. Bank speci…c and industry speci…c factors of disclosure are being empirically examined using univariate and multivariate statistical methods. Further research objective is to compare the volume and the structure of mandatory disclosed information using content analysis. It is expected that banks with higher transparency achieve signi…cantly better …nancial performance. However, the paper does not empirically investigate bene…ts or drawbacks of both mandatory and voluntary disclosure. For all the aforementioned reasons the paper might be provide useful insights for academics, students of economics and, most of all, for the general public, especially depositors as major providers of bank funds.