IDEAS home Printed from https://ideas.repec.org/a/ris/tecemp/1802.html
   My bibliography  Save this article

Determinants of credit supply to Micro, Small and Medium enterprises by financial institutions

Author

Listed:
  • Rocca Espinoza, Eduardo

    (Pontificia Universidad Católica del Perú)

  • García Pérez de Lema, Domingo

    (Universidad Nacional de Río Negro, Argentina)

  • Duréndez Gómez Guillamón, Antonio

    (Universidad Politécnica de Cartagena, España)

Abstract

In this paper we analyze the main criteria that financial institutions consider when granting credit to a MSME, in order to minimize their risk of default. For this purpose, an empirical study was carried out on 73 risk analysts from Peruvian financial institutions. The criteria used by financial institutions are classified into: personality and experience of the entrepreneur; characteristics of the product or service offered by the company and the market where it operates; strategy and organization of the company; and criteria related to the accounting information presented by companies. The results show that the most relevant criteria considered by the risk analysts when granting a credit are: knowledge of the sector that has the entrepreneur, honesty and integrity of the entrepreneur, the client portfolio with which the company has, and qualification of the personnel of the company. Regarding the criteria related to accounting information, risk analysts especially value the liquidity and debt ratios, that companies carry some reliable cost system and that they do not appear in defaults such as INFOCORP. This work is especially useful to financial institutions to help them improve their rating systems, and to MSMEs to foster a better relationship with financial institutions.

Suggested Citation

  • Rocca Espinoza, Eduardo & García Pérez de Lema, Domingo & Duréndez Gómez Guillamón, Antonio, 2018. "Determinants of credit supply to Micro, Small and Medium enterprises by financial institutions," TEC Empresarial, School of Business, Costa Rica Institute of Technology (ITCR), vol. 12(1), pages 19-30.
    • Handle: RePEc:ris:tecemp:1802
    as

    Download full text from publisher

    File URL: https://revistas.tec.ac.cr/index.php/tec_empresarial/article/view/3568
    File Function: Full text
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:tecemp:1802. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Esteban Lafuente (email available below). General contact details of provider: https://edirc.repec.org/data/eaitccr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.