Determinants of SME credit worthiness under Basel rules: the value of credit history information
AbstractThe Basel III Accord has reportedly had an impact on SME financing. In this paper, we aim to highlight the determinants of SME credit worthiness. We use credit history in addition to financial ratios and OhybridO indicators that have been built by mixing credit history with financial statement data. We develop a failure prediction logit model on 187 Italian SMEs. The use of short-term credit lines is the most important variable. Contrary to common understanding, capitalization levels do not affect ratings. Lastly, credit worthiness is sensitive to sale profitability.
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Bibliographic InfoArticle provided by Economia civile in its journal PSL Quarterly Review.
Volume (Year): 66 (2013)
Issue (Month): 264 ()
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Web page: http://www.economiacivile.it
Find related papers by JEL classification:
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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