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Does trust matter in lending decisions? A systematic literature review and research agendas for future studies

Author

Listed:
  • Nieldya Nofandrilla

    (Universitas Muhammadiyah Surakarta)

  • Ibrahim Fatwa Wijaya

    (Universitas Sebelas Maret
    Universitas Sebelas Maret)

  • Bambang Setiaji

    (Universitas Muhammadiyah Surakarta
    Universitas Muhammadiyah Kalimantan Timur)

Abstract

The business activities in the Islamic world and in Venice (Europe) demonstrate the reliance of the Middle Ages financing system on trust. Trust has been thoroughly analysed thus far in the context of the interaction between buyers and sellers, as well as in alliances. However, there is still a lack of study undertaken on the relationship between trust and loan (in Islamic terms, financing) decision-making. The first objective of this Systematic Literature Review (SLR) is to analyse previous research on the relationship between trust and lending decisions, specifically focussing on bank lending to small and medium-sized enterprises (SMEs). The second aim of this SLR is to establish research agendas for future studies. SLR is selected in order to achieve a comprehensive understanding of the matter at hand. This synthesis focusses around three main themes: the building of trust, the concept of trust, and the impact of trust on lending outcomes. There are significant opportunities for more study in the areas of trust, bank lending, and SMEs. We offer a suggestion of future research for enhancing our understanding of trust and lending decisions.

Suggested Citation

  • Nieldya Nofandrilla & Ibrahim Fatwa Wijaya & Bambang Setiaji, 2025. "Does trust matter in lending decisions? A systematic literature review and research agendas for future studies," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 72(1), pages 1-62, June.
    • Handle: RePEc:spr:inrvec:v:72:y:2025:i:1:d:10.1007_s12232-024-00477-4
    DOI: 10.1007/s12232-024-00477-4
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    Keywords

    Trust; Loan; Bank; Islamic bank; SMEs; Relationship lending;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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