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    SME Credit Risk Analysis Using Bank Lending Data: An Analysis of Thai SMEs

    Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad; Charoensivakorn, Phadet; Niraula, Baburam | July 2015
    Abstract
    Small and medium-sized enterprises (SMEs) are the backbone of most Asian economies. The main obstacle to the development of the SME sector is the lack of stable finance. Considering the bank-dominated characteristic of economies in Asia, banks are the main source of financing, and the lack of a comprehensive credit rating database has been a bottleneck for SMEs. This paper examines how a credit rating scheme for SMEs can be developed, when access to other financial and non-financial ratios is not possible, by using data on lending by banks to SMEs. We employ statistical techniques on five variables from a sample of Thai SMEs and classify them into subgroups based on their financial health. By employing these techniques, banks could reduce information asymmetry and consequently set interest rates and lending ceilings for SMEs. This would ease financing to healthy SMEs and reduce the amount of non-performing loans to this important sector.
    Citation
    Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad; Charoensivakorn, Phadet; Niraula, Baburam. 2015. SME Credit Risk Analysis Using Bank Lending Data: An Analysis of Thai SMEs. © Asian Development Bank Institute. http://hdl.handle.net/11540/9654.
    Keywords
    Development
    Finance
    Development Challenges
    Development Issues
    Development Problems
    Microenterprises Finance
    Commercial Finance Companies
    Enterprise Financing
    Financial Analysis
    Banking Finance And Investment
    SMEs
    Small Business Finance
    ADB
    Project finance
    Development plans
    Strategic planning
    Business Financing
    Investment Requirements
    Insurance Companies
    International Monetary Relations
    International Financial Market
    Exchange Rate
    Insurers
    Insurance stocks
    Insurance holding companies
    Insurance carriers
    Insurance agencies
    Business subsidies
    Investment companies
    Foreign investment
    Equity Finance
    International banks and banking
    Stock exchanges
    Grants
    Loans
    Communication in rural development
    Communication in community development
    Economic development projects
    Development banks
    Economic forecasting
    Environmental auditing
    Cumulative effects assessment
    Human rights and globalization
    Small business
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/9654
    Metadata
    Show full item record
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    adbi-wp536.pdf (458.8Kb)
    Author
    Yoshino, Naoyuki
    Taghizadeh-Hesary, Farhad
    Charoensivakorn, Phadet
    Niraula, Baburam
    Theme
    Development
    Finance
    Small Medium Business

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    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise