An analysis of the macroeconomic conditions required for SME lending: Evidence from Turkey and other emerging market countries

Jenkins, Hatice; Hossain, Monir

doi:10.2298/pan140213008j

Cited by 9 publications

(7 citation statements)

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“…[43] explained that the banks' decision to lend SMEs might be influenced by the individual characteristics of the SME only but also by Macroeconomic factors. [44] proposed that macroeconomic elements contributed to expanded bank lending to SMEs in six emerging nations (Turkey, Argentina, Brazil, Mexico, Chile, and Poland), so to decrease the risk of uncertainty the banks study hard the macroeconomic environment and update the credit officer with the latest regulation and information to mull over when evaluate the customer and business.…”

Section: The 5 Cs Of Lendingmentioning

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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Section: The 5 Cs Of Lendingmentioning

confidence: 99%

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

Boushnak¹,

Rageb²,

Ragab³

et al. 2018

OALib

View full text Add to dashboard Cite

show abstract

“…Financial liberalisation measures were, however, executed in an inflationary environment and macroeconomic instability (Jenkins and Hossain, 2017). A surge in public expenditure resulted in budget deficits, and banks assumed the role of financing the public sector with high real interest rates instead of carrying out their financial intermediation function (Ozatay and Sak, 2002).…”

Section: Introductionmentioning

confidence: 99%

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Erdogan

2019

Economic Research-Ekonomska Istraživanja

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To contribute to the small and medium-sized enterprises (SMEs) financing literature, this paper uses a unique sample of 492 Turkish SMEs to analyse the firm-level determinants of SME perceptions of bank financing accessibility. Logistic regression results reveal that older and relatively more innovative firms are more positive about their ability to secure bank loans, as are SMEs that have longer relationships with their oldest banks. Firms with two owners are more inclined than firms with a single owner and firms with three or more owners to perceive accessing bank loans as easy. This finding signals that although bank loan applications of firms with two owners have higher credibility than those of firms with a single owner, having more than two owners creates more complex agency problems for banks. Compared with firms incurring a loss, firms that make a profit or break even perceive it to be easier to obtain bank financing. SMEs in the service industry are more positive about accessing bank loans than are firms in manufacturing and other industries.

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“…Banks regard SMEs as a lending target group (Jenkins & Hossain, 2017). According to the current study, it is caused by factors such as active state support for SMEs during financial crises (Antoniuk, Gernego, Dyba, Polishchuk, & Sybirianska, 2017) and positive changes in macroeconomic environment.…”

Section: Literature Reviewmentioning

confidence: 79%

SMEs debt financing in the EU: on the eve of the coronacrisis

Polishchuk

Kornyliuk

Lopashchuk

et al. 2020

Banks and Bank Systems

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SMEs are the main drivers of economic development. As the debt crisis and coronavirus crisis show, despite their importance, they are extremely sensitive to economic downturns. Therefore, SMEs need to be supported through various tools. The paper is aimed at evaluating the SMEs’ bank and governmental support in the northern and southern EU countries in two crisis periods and assessing the financial state of SMEs on the eve of coronacrisis using micro-level data. It was proved that bank loans and credit lines remain the main sources of SMEs’ financing. After the debt crisis, banks are becoming more loyal to SMEs.It was proved that SMEs from the northern EU countries suffered less from the previous crisis and therefore started their recovery earlier than the southern ones in terms of profitability, liquidity and debt burden. In addition, it was shown that both groups on the eve of the new turbulence period were in better financial state compared to the previous debt crisis. The southern EU countries suffered more from both crises. At the same time, due to effective governmental support and bank loyalty, their SMEs entered the coronacrisis at the same level of financial stability as the northern ones. Since the new support measures are concentrated primarily in the banking sector through loan guarantee schemes and reduced interest rates, it is essential to provide debt financing to high-quality borrowers and avoid the debt crisis in southern counties.

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An analysis of the macroeconomic conditions required for SME lending: Evidence from Turkey and other emerging market countries

Cited by 9 publications

References 0 publications

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

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

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

SMEs debt financing in the EU: on the eve of the coronacrisis

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