Determinants of loan survival rates for small and medium-sized enterprises : Evidence from an emerging economy

This article investigates the determinants of bank loan survival time in an emerging economy for ‘micro’, ‘small’ and ‘medium’-sized enterprises. We use proprietary data from the Central Bank of Mexico for approximately 1.5 million company loans between January 2010 and May 2017. Our results show that firm' characteristics at the time of loan origination, and lagged macroeconomicfactors have a significant impact on the loan survival times. Further tests on model validation show that our fitted survival model performs reasonably well in out of sample forecasts