Beyond the Numbers: Social Factors in Credit Risk

Samuel Asuamah Yeboah, Diana Mogre and Benjamin Prince Nartey Menzo

MPRA Paper from University Library of Munich, Germany

Abstract: This review explores the critical impact of social and cultural factors on credit risk assessment and lending practices, especially in developing countries. By examining existing research, we delve into how cultural norms, social relationships, and community dynamics shape the evaluation of creditworthiness for small and medium-scale enterprises (SMEs). Our findings offer valuable insights for policymakers, financial institutions, and researchers aiming to enhance the accuracy and cultural sensitivity of credit risk management strategies for SMEs in these contexts.

Keywords: Credit risk assessment; lending decisions; social factors; cultural dynamics; small and medium-scale enterprises (SMEs); developing countries; community relationships; cultural norms; creditworthiness evaluation; financial inclusion. (search for similar items in EconPapers)
JEL-codes: D14 G21 O16 Z13 (search for similar items in EconPapers)
Date: 2024-07-13, Revised 2024-08-20
New Economics Papers: this item is included in nep-fle, nep-mac and nep-rmg
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