Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from Firm?Bank Matched Data in Japan

Arito Ono, Ryo Hasumi and Hideaki Hirata ()

Working Paper from Harvard University OpenScholar

Abstract: This paper examines the ex-post performance of small and medium enterprises (SMEs) that obtained small business credit scoring (SBCS) loans, using a unique Japanese firm?bank matched dataset. The ex-post probability of default after the SBCS loan was provided significantly increased for SMEs that obtained an SBCS loan from a transactional lender. Also, the lending attitude of relationship lenders during the recent global financial crisis was more severe if a firm had received an SBCS loan from a transactional lender. These findings suggest that SBCS loans by transactional lenders are more prone to type II errors and detrimental to relationship lenders? incentive to provide ?liquidity insurance.

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Related works:
Journal Article: Differentiated use of small business credit scoring by relationship lenders and transactional lenders: Evidence from firm–bank matched data in Japan (2014)
Working Paper: Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from Firm-Bank Matched Data in Japan (2012)
Working Paper: Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from firm-bank matched data in Japan (2011)
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