The Impact of Non-Financial and Financial Variables on Credit Decisions for Service Companies in Turkey

This study aims to analyze and generalize the factors influencing credit decision-making in Turkey’s service sector, which has seen substantial growth and increased dynamism post-2000, coinciding with accelerated economic development. The evolving competitive landscape and shifting consumer purchasing perceptions have led companies within this sector to seek differentiation strategies to attain a competitive edge. In this context, access to credit emerges as a crucial enabler for companies to expand and capture market share. The research focuses on the financial and non-financial characteristics of medium-sized service sector firms seeking credit, recognizing that both sets of variables play a pivotal role in the credit allocation process conducted by banks. The core of this study involves applying established assumption tests from extant literature, followed by an extensive regression analysis. The primary objective of this analysis is to identify and underscore the key financial and non-financial factors that significantly impact credit decisions in the service sector. By examining these variables, the study seeks to contribute valuable insights into the credit decision-making process, addressing the nuanced and varied nature of the service sector. This approach not only provides a deeper understanding of the sector’s credit dynamics but also assists in formulating more informed strategies for businesses seeking financial support within this evolving economic landscape. The primary conclusion reached by the study is that non-financial variables exert a greater influence on credit decision-making in the service sector compared to financial variables.