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A Credit Score System for Socially Responsible Lending

Author

Listed:
  • Begoña Gutiérrez-Nieto

    () (Universidad de Zaragoza)

  • Carlos Serrano-Cinca

    (Universidad de Zaragoza)

  • Juan Camón-Cala

    (Universidad de Zaragoza)

Abstract

Abstract Ethical banking, microfinance institutions or certain credit cooperatives, among others, grant socially responsible loans. This paper presents a credit score system for them. The model evaluates social and financial aspects of the borrower. The financial aspects are evaluated under the conventional banking framework, by analysing accounting statements and financial projections. The social aspects try to quantify the loan impact on the achievement of Millennium Development Goals such as employment, education, environment, health or community impact. The social credit score model should incorporate the lender’s know-how and should also be coherent with its mission. This is done using Multi-Criteria Decision Making (MCDM). The paper illustrates a real case: a loan application by a social entrepreneur presented to a socially responsible lender. The decision support system not only produces a score, but also reveals strengths and weaknesses of the application.

Suggested Citation

  • Begoña Gutiérrez-Nieto & Carlos Serrano-Cinca & Juan Camón-Cala, 2016. "A Credit Score System for Socially Responsible Lending," Journal of Business Ethics, Springer, vol. 133(4), pages 691-701, February.
  • Handle: RePEc:kap:jbuset:v:133:y:2016:i:4:d:10.1007_s10551-014-2448-5
    DOI: 10.1007/s10551-014-2448-5
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    References listed on IDEAS

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    Cited by:

    1. Simon Cornée & Ariane Szafarz, 2014. "Vive la Différence: Social Banks and Reciprocity in the Credit Market," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 125(3), pages 361-380.
    2. repec:kap:jbuset:v:147:y:2018:i:3:d:10.1007_s10551-015-2948-y is not listed on IDEAS
    3. Anastasia Cozarenco & Ariane Szafarz, 2018. "Gender Biases in Bank Lending: Lessons from Microcredit in France," Journal of Business Ethics, Springer, vol. 147(3), pages 631-650, February.

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