Previous research on relationship lending has paid very little attention to the role of trust. Trust might be ex-pected to reduce agency costs, perceived credit risk and thus the request for personal collateral. Trustworthiness is associated with three attributes of SME owner/managers’:...

We use loan-level data to study how the organizational structure of banks impacts small business lending. We find that decentralized banks ― where branch managers have greater autonomy over lending decisions ― give larger loans to small firms and those with “soft information”. However,...

The survey research design was adopted, and the study was specifically designed to evaluate the challenges of bank-credit among SMEs in Nigeria and make recommendations. The questionnaire and indent interview methods were used to generate data. Data generated were coded and analyzed through...

We use data from the World Bank's Enterprise Surveys to test the importance of governance to the availability of credit. We model the credit-allocation process for SMEs in three steps. Based upon these steps, we classify small businesses into four groups based upon their credit needs – firms...

This paper examines the characteristics of financial institutions that provide financing to new firms using a unique firm-bank match-level dataset of more than 3,000 unlisted small and medium-sized enterprises (SMEs) incorporated in Japan. We employ a within-firm estimator that perfectly...

Research Summary: When evaluating Internet-based loan project of small and medium size firms (SME), lenders can rely on easy-to-understand risk ratings or more sophisticated financial information. We investigate lenders decisions and its effect on loan funding success on the marketplace lending...

The purpose of this research is to examine the impact of microfinance bank credit and its debt servicing on the profitability of SMEs in Alimosho Local Government Area, Lagos State, Nigeria. A survey was carried out involving 387 SMEs in Alimosho LGA, Lagos State and information was extracted...

By employing a sample of 20,956 observations of non-financial SMEs headquartered in the Euro area, between 2009 and 2015, we test whether young businesses are more likely to face credit rejections from lenders than their older peers. Our findings appear to confirm our suspicions that new...

We investigate two questions: (1) Do bank lending decisions to small and medium-sized firms provide information about these firms' future financial performance? (2) Does this predictability vary across different stages of the credit cycle? Based on a unique, detailed data set of all Norwegian...

This paper investigates two aspects of the demand side determinants of bank lending for a sample of Australian SMEs. Using data from the Growing Australian Business Survey we document the results on why a sample of Australian SMEs seek bank finance and bank credit rationing of loan applications....