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

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Eduardo Rocca Espinoza
Domingo García Pérez de Lema
Antonio Duréndez Gómez Guillamón


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.

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Rocca Espinoza, E., García Pérez de Lema, D., & Duréndez Gómez Guillamón, A. (2018). Determinants of credit supply to Micro, Small and Medium enterprises by financial institutions. Tec Empresarial, 12(1), 19–30.