The impact of SMEs’ lending and credit guarantee on bank efficiency in South Korea

Liang, Lien‐Wen; Huang, Bor-Yi; Liao, Chih-Feng; Gao, Yuting

doi:10.1016/j.rdf.2017.04.003

Cited by 50 publications

(47 citation statements)

References 38 publications

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“…For banks, collateral value will reduce the default risk from debtors, because banks can sell their assets to cover the bad debts. The increased proportion of credit guarantee can improve their cost efficiency (Liang et al, 2017).…”

Section: Resultsmentioning

confidence: 99%

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

2019

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Many business owners attempt to apply for bank credit, but not all of them are approved. This study aims to reveal the factors determining credit approval to Micro, Small, and Medium Enterprises (MSME). The variables used in this study are the owner's capital, company establishment, collateral value, credit amount, owner's age, and good relationship with the bank. In this study, the logit model used as a technique of analysis, in which there is only one dependent variable in the form of dummy along with the other six independent variables. The statistical test reveals that simultaneously all independent variables have significant effects on credit approval. Partially, only the owner's capital and good relationships with the bank do affect the approval. Therefore, business owners should pay more attention to their amount of capital and interrelation with the bank when applying for bank credit.Abstrak. Banyak pemilik usaha berupaya untuk mengajukan kredit kepada bank, namun tidak semua pengajuan tersebut disetujui. Penelitian ini berusaha untuk mengungkapkan faktor-faktor yang menentukan persetujuan pembeian kredit kepada Usaha Mikro, Kecil, dan Menengah (UMKM). Variabel-variabel yang digunakan adalah modal pemilik, lama berdirinya usaha, nilai jaminan, jumlah kredit, usia pemilik, dan hubungan baik dengan pihak bank. Di dalam penelitian ini, digunakan model logit yang mana hanya terdapat satu variabel dependen dalam bentuk dummy bersama dengan enam variabel independen lainnya. Hasil pengujian statistik mengungkapkan bahwa secara simultan seluruh variabel independen memiliki pengaruh yang signifikan terhadap persetujuan pemberian kredit. Secara parsial hanyalah modal pemilik dan hubungan baik dengan pihak bank yang menentukan persetujuan pemberian kredit tersebut. Oleh karena itu, para pemilik usaha perlu memberikan perhatian lebih kepada besarnya modal yang dimiliki dan hubungan baik yang terjalin dengan pihak bank ketika mengajukan kredit kepada bank.

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Section: Resultsmentioning

confidence: 99%

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

2019

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“…The elements considered under character assessment include trustworthiness, a track record of loan repayment, experience, education, age, gender among others. The collateral assessment considers the assets and property the borrower possesses (Duarete, Gama, & Esperanca, 2017;Liang, Huang, Liao, & Gao, 2017).…”

Section: Criteria For Deposit Bank Lending To Smesmentioning

confidence: 99%

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Aladejebi¹

2019

theijbm

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Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria 1. Introduction Small and medium enterprises (SMEs) can be likened to a propeller that powers the engine of a nation's economy for growth and development (Oladele, Olowookere & Akinruwa, 2014). SMEs are businesses involved in different activities across Nigeria. Their businesses include the production of local agricultural implements, bar owners, tailors, iron fabricators, vehicle mechanics, transporters, internet café owners, washmen, software development et al. SMEs are also involved in producing for domestic and international markets. SMEs can be found in rural, urban, regional, national or international markets (Ikpor, Nnabu & Obaji, 2017). According to the United Nations Industrial Development Organisation (UNIDO, 2012), SMEs play a significant role in the economic development of nations as they play a prominent role in the private sector. SMEs make up over 90percent of entrepreneurs of the world and are responsible for 50 to 60percent of employment generation (Ayuba, & Zubairu, 2015). SMEs occupy an essential position in almost every country or state, and they have been recognized so by government and development experts as the main engine of economic growth and a significant force in the promotion of private sector development (Gbadi & Amisah, 2014). For any developing country to grow and develop economically, greater attention must be paid to the SME sector (Awoniyi, 2010). UNCTAD, (2001) observed that finance had been identified in many business surveys and researches as one of the main factors determining the survival and growth of SMEs in both developing and developed countries. Banking sector help to make credit available to firms by mobilizing surplus fund from deposits and channel it in the form of credit to investors (Nwanyanwu, 2012). Finance remains one of the barriers to the growth of SMEs in Nigeria (Lawanson, 2007). Lending is one of the leading business of deposit banks through which they generate income (Asantey & Tengey, 2014). Bank finance is an essential source of funds for most organizations (Yeboah, Asirifi & Adigbo, 2014). Access to finance is vital to business start-up, development, and growth for SMEs (Shikumo & Mwangi, 2016). Deposit Banks play a crucial role in economic resource allocation in many countries. Deposit banks mobilize deposits and channel it to investors who need funds (Ongore & Kusa, 2013). Olusanya, Oyebo & Ohadebere (2012) observed that Deposit banks fund entrepreneurs leading to product development and process. Lack of credit facilities has been identified as one of the barriers to the performance of SMEs in Nigeria (Ikpor, Nnabu & Obaji, 2017). The shortage of capital inhibits the relevance of SMEs solving macroeconomic challenges, inability to access fund from financial agencies (Schneider, 2002). Akambi and Joseph (2013) observed that the level of credit availability has a significant impact on the growth and development of SMEs across the world. Access to finance by SMEs is key ...

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“…presented that collateral was the biggest obstructions to SME financing in Zimbabwe [35]. stated there are a requirement for SMEs to give collateral to borrow [36]. affirmed that South Korea's credit guarantee schemes enhanced bank efficiency, since it assures the security of loans and shares the credit risk to the bank [37].…”

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confidence: 99%

Factors Influencing Credit Decision for Lending SMEs: A Case Study on National Bank of Egypt

Boushnak¹,

Rageb²,

Ragab³

et al. 2018

OALib

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Small and Medium Enterprises (SMEs) play a vital role in the global economy. It had a major part in creating jobs and as a source of social stability, either there is major contribution for SMEs in Egypt as it faces great economy challenges that need cooperation from all parties. However, access to finance is still one of the greatest obstacles facing SMEs all over the world and prevents them from developing. This research is important to fill the research gap which appears in the limited researches that present main factors adopted by the credit decision maker in Banks for evaluating the SMEs. Purpose of this study is to make a progress for filling the gap through exploring these factors. The research was guided by the following research questions: What are the factors that influence credit decision making for lending SMEs? What framework is available to improve the SMEs lending process in the Egyptian Banks? Case study strategy and Quantitative Methods were adopted. Data was gathered from 313 structured questionnaires answered by credit risk and marketing employees from National Bank of Egypt (NBE). The author tested five hypotheses on the relationship between variables, with the SPSS "Package for the Social Sciences" and AMOS "Analysis of a Moment Structure". They were utilized to interpret the results. The findings provide evidence that factors, like Owner/Manager Character, Capacity, Firm Capital Size, Credit Bureau Report with the availability and Credibility of Financial statements, had a huge impact on Credit Decision for lending SMEs. From the research results, there was framework designing to enhance the credit risk assessment process, which could decrease the uncertainty and time consuming in the lending decision and it might reflect positively on the national economy development.

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The impact of SMEs’ lending and credit guarantee on bank efficiency in South Korea

Cited by 50 publications

References 38 publications

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

Critical Factors That Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

Determinants of Lending to small and medium Enterprises by Deposit Banks in Nigeria

Factors Influencing Credit Decision for Lending SMEs: A Case Study on National Bank of Egypt

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