Determinants of SME credit worthiness under Basel rules: the value of credit history information

Francesco Dainelli, Francesco Giunta and Fabrizio Cipollini ()

PSL Quarterly Review, 2013, vol. 66, issue 264, 21-47

Abstract: The 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.

Keywords: Basel accord; Small business financing; credit historical data; rating (search for similar items in EconPapers)
JEL-codes: E51 G24 M21 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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