Multinational companies are suited to serve as intermediaries in the global tier

Multinational companies are suited to serve as intermediaries in the global tier, but local firms are better able to cater to the other tiers. For example, multinational banks serve large blue-chip customers in emerging markets because evaluating those companies’ trustworthiness is relatively straightforward. Those businesses produce high-quality financial statements, get them audited by globally reputable accountants and follow international accounting norms. However, evaluating the credit of small and medium enterprises is tough: There’s so little data on them. Domestic banks, with their local knowledge and informal connections, cater to this segment better than foreign banks do.

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Source:- IIPM Editorial

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