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Building a Scoring Model for Small and Medium Enterprises

Author

Listed:
  • Răzvan Constantin CARACOTA

    (Bucharest Academy of Economic Studies)

  • Maria DIMITRIU

    (Bucharest Academy of Economic Studies)

  • Maria-Ramona DINU

    („Politehnica” University of Bucharest)

Abstract

The purpose of the paper is to produce a scoring model for small and medium enterprises seeking financing through a bank loan. To analyze the loan application, scoring system developed for companies is as follows: scoring quantitative factors and scoring qualitative factors. We have estimated the probability of default using logistic regression. Regression coefficients determination was made with a solver in Excel using five ratios as input data. Analyses and simulations were conducted on a sample of 113 companies, all accepted for funding. Based on financial information obtained over two years, 2007 and 2008, we could establishe and appreciate the default value.

Suggested Citation

  • Răzvan Constantin CARACOTA & Maria DIMITRIU & Maria-Ramona DINU, 2010. "Building a Scoring Model for Small and Medium Enterprises," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 9(9(550)), pages 117-128, September.
    • Handle: RePEc:agr:journl:v:9(550):y:2010:i:9(550):p:117-128
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