Made available in DSpace on 2016-04-26T20:48:41Z (GMT). No. of bitstreams: 1 Daniel Barbosa Garzillo.pdf: 7742102 bytes, checksum: ccc529c50af11e38fc9bcc6b79167656 (MD5) Previous issue date: 2014-11-28 / Despite being an important variable for development of economies, by financing expenditure and investment projects, the credit market is few developed in Brazil when compared to the most developed countries. This fact seems to be strongly correlated with high spreads and interest rate on bank loans charged by the Brazilian banking sector. The orthodox theory is the one that most deeply study this topic and point to five main reasons as determinants of different credit costs between countries: competition in the banking sector; macroeconomic environment; taxation, reserves requirement and mandated lending; and availability of information about borrowers. Assessing Brazil in the indicated items, there is notable improvement in almost all factors during de 2000s, however, despite of the cutbacks in interest rates and spreads, we can explain only partially the reduction observed and, in addiction, we note that the credit costs in Brazil are still high comparing to other countries. We understand that SELIC may explain the high level of Brazilian credit costs, because beyond affect directly the costs of funding, it represents a high cost of opportunity of offering credit, since SELIC remunerate part of Brazilian treasury bills, which become profitable, low risk and high liquidity assets / Apesar de ser um importante fator para o desenvolvimento das economias por propiciar liquidez ao sistema e financiar consumo e projetos de investimento, o mercado de crédito é pouco desenvolvido no Brasil quando comparado com as principais economias do mundo. Este fato parece ter forte correlação com os elevados spreads e taxas de juros praticadas pelo setor bancário brasileiro. A teoria ortodoxa convencional trata do tema e aponta para cinco principais fatores como determinantes das diferenças de custos de crédito entre os países: grau de competição do setor bancário; ambiente macroeconômico; tributação, requerimento de reservas e empréstimos subsidiados; e disponibilidade de informações sobre os mutuários. Ao avaliar o Brasil nos itens indicados, notamos sensível melhora em praticamente todos os fatores durante os anos 2000, entretanto, apesar das reduções das taxas de juros e spreads, consegue-se explicar apenas parte da queda verificada e, além disso, notase que os custos de crédito no Brasil ainda são elevados em relação a outros países. Entendemos que a taxa SELIC possa ser a explicação para os patamares ainda elevados dos custos de financiamento no Brasil, pois, além de influenciar diretamente os custos de captação, ela representa, para o setor bancário, um alto custo de oportunidade de se ofertar crédito por ser base para remuneração de parte dos títulos da dívida do governo brasileiro, tornando-os ativos rentáveis, de baixo risco e alta liquidez

Submitted by Filipe dos Santos (fsantos@pucsp.br) on 2018-04-09T13:02:54Z No. of bitstreams: 1 Fernanda Maria Nogueira Lima.pdf: 788057 bytes, checksum: 838df4778a4b2acc04363ac858268d61 (MD5) / Made available in DSpace on 2018-04-09T13:02:54Z (GMT). No. of bitstreams: 1 Fernanda Maria Nogueira Lima.pdf: 788057 bytes, checksum: 838df4778a4b2acc04363ac858268d61 (MD5) Previous issue date: 2018-03-05 / The purpose of this study was to analyze the granting of microcredit in Brazil in the period 1995-2013 comparing the Brazilian experience with the experience of Bangladesh. In the last decades it has been observed a substantial advance in the financial market with the development of several tools that contribute to the increment of the current economic scenario. This evolution, over time, has promoted a national economic development, besides contributing to the reduction of unemployment and informality in companies. However, there is still a large gap between the low-income population and the tools available, as it is possible to observe that the high cost of credit operations for the population, mainly due to the lack of real guarantees, costs of these operations, resulting in an obstacle to obtaining credit in Brazil and consequently the financial inclusion of this population. Banking is one of the possible mechanisms to insert the low income population in the banking system and to promote a regulatory form that allows these people to obtain access to a subsidized credit, enabling entrepreneurship, the release of resources for investment and working capital, resulting in in obtaining credit with sustainability and contributing to the financial inclusion and citizenship of the most disadvantaged classes. In the course of this endeavor, the most successful experience, both in practical terms and in theoretical terms, is the case of Bangladesh, which served as a scope to verify why it persisted for several periods and economic policies and even with several governments in different periods, such as the 1995-2013 period, it was noted that the intentions were frustrated and did not make significant progress. Based on the Microcredit Revolution, the successful case of Bangladesh and the Brazilian experience were compared, since they are countries with similar initiatives of financial inclusion, public services of insufficient quality and with still anachronistic problems in socioeconomic indicators. It is concluded that despite being in the process of improvement, it has not yet promoted the social inclusion expected due to the high costs. Therefore, the results are heterogeneous, where some segments show improvement, and others, such as those of extreme poverty, microcredit further aggravates the situation, promoting inability to pay and consequent indebtedness / O presente estudo teve por objetivo analisar a concessão de microcrédito no Brasil no período 1995-2013 comparando a experiência brasileira com a experiência de Bangladesh. Nas últimas décadas constatou-se um avanço substancial no mercado financeiro com o desenvolvimento de várias ferramentas que contribuem para o incremento do cenário econômico atual. Tal evolução, ao longo do tempo, promoveu um desenvolvimento econômico nacional, além de contribuir para a redução do desemprego e da informalidade nas empresas. Contudo, tem-se ainda uma grande lacuna entre a população de baixa renda e as ferramentas disponíveis, uma vez que é possível observar que o alto custo das operações de crédito para a população, principalmente devido à falta de garantias reais, eleva ainda mais os custos das referidas operações, resultando em um entrave de obtenção do crédito no Brasil e consequentemente a inclusão financeira desta população. A bancarização é um dos mecanismos possíveis para inserir a população de baixa renda no sistema bancário e promover uma forma regulamentar que permita que estas pessoas obtenham acesso a um crédito subsidiado, possibilitando o empreendedorismo, a liberação de recursos para investimento e capital de giro, resultando na obtenção de crédito com sustentabilidade e contribuindo para a inclusão financeira e cidadania das classes mais desfavorecidas. No decorrer desta empreitada, a experiência mais bem-sucedida, tanto em termos práticos quanto em termos teóricos, é o caso de Bangladesh, que serviu de escopo para verificar o porquê de mesmo persistindo por vários períodos e políticas econômicas e mesmo com vários governos em períodos distintos, como o caso do período 1995-2013, percebeu-se que as intenções foram frustradas e não obtiveram progressos significativos. Com base na Revolução do Microcrédito fez-se a comparação do caso bem-sucedido de Bangladesh e a experiência brasileira, por se tratar de países com iniciativas semelhantes de inclusão financeira, serviços públicos de qualidade insuficientes e com problemas ainda anacrônicos nos indicadores socioeconômicos. Conclui-se que apesar de estar em processo de melhoria, ainda não promoveu a inclusão social esperada devido aos altos custos. Logo, os resultados são heterogêneos, onde alguns segmentos apresentam melhorias, e outros, como aqueles de extrema pobreza, o microcrédito agrava ainda mais a situação, promovendo a incapacidade de pagamento e consequente endividamento

Lau Siu-lun. / Thesis (M.Phil.)--Chinese University of Hong Kong, 1994. / Includes bibliographical references (leaves 134-139). / ACKNOWLEDGEMENT --- p.i / abbreviation --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF CHARTS --- p.iv / list of tables --- p.v / introduction --- p.1 / Chapter I. --- The Query --- p.1 / Chapter II. --- Methodology --- p.8 / Chapter chapter 1. --- the problem stated --- p.12 / Chapter I. --- The Banking structure and Regulatory Framework --- p.13 / Chapter A) --- An Overview --- p.13 / Chapter B) --- Regulatory Framework --- p.16 / Chapter II. --- Manufacturers' Grievances --- p.20 / Chapter A) --- The claims on Sufficiency of Bank Financing --- p.21 / Chapter B) --- The claims on insufficiency of Bank Financing --- p.23 / Chapter III. --- The Quantitative side:Trends of Loans Distrbution --- p.29 / Chapter chapter 2. --- TOWABD A SOCIOLOGICAL THRORY OF TRUST --- p.43 / Chapter I. --- Luhmann's Notion of Trust --- p.44 / Chapter II. --- Granovetter's Notion of Trust --- p.49 / Chapter III. --- institution Production of Trust: Zucker and Shapiro --- p.55 / Conclusions --- p.62 / Chapter CHAPTER 3. --- TRUST： ON THE POSSIBILITY OF SANCTION --- p.65 / Chapter I. --- The lending procedure --- p.66 / Chapter II. --- Trust and lending --- p.67 / Chapter III. --- on Security...And the Drawbacks --- p.74 / Conclusions --- p.82 / CHAPTER 4. TRUST： OH FAMILIARITY --- p.84 / Chapter I. --- On Familiarity --- p.85 / Chapter A) --- The Individual Aspect --- p.86 / Chapter B) --- The Firm Level --- p.90 / Chapter C) --- The Wider Environment --- p.93 / Chapter II. --- The Unfamiliar Environment --- p.96 / Chapter A) --- The unfamiliar situations --- p.97 / Chapter B) --- Loans Products and Familiarity --- p.102 / Chapter C) --- Who are More Daring to Lend ？ --- p.104 / Conclusions --- p.105 / Chapter CHAPTER 5. --- THE MANUFACTURING SECTOR OF HONG KONG： the credit worthiness --- p.107 / Chapter I. --- The Standing of Manufacturers --- p.107 / Chapter II. --- Finance and Early Industrialization --- p.116 / conclusions --- p.123 / Chapter I. --- on the Banking Sector and the Manufacturing Sector --- p.123 / Chapter II. --- Theoretical Implications --- p.128 / epilogue --- p.133 / bibliography --- p.134 / Chapter chart 2.1 --- Total Deposit Growth： 1966 to1991 --- p.15 / Chapter chart 2.2 --- "percentage distribution of loans and advances for use in Hong Kong,1965 to 1981" --- p.31 / Chapter chart 2.3 --- "pecentage distribution of loans and advances for use in Hong Kong,1982 to 1990" --- p.32

Submitted by Filipe dos Santos (fsantos@pucsp.br) on 2016-11-01T11:25:52Z No. of bitstreams: 1 Ana Cecília Rosário Ribeiro.pdf: 2233630 bytes, checksum: c41b7fb3d479b911fd07c1d907dbc976 (MD5) / Made available in DSpace on 2016-11-01T11:25:52Z (GMT). No. of bitstreams: 1 Ana Cecília Rosário Ribeiro.pdf: 2233630 bytes, checksum: c41b7fb3d479b911fd07c1d907dbc976 (MD5) Previous issue date: 2016-08-14 / Private autonomy in payroll loan contracts is restricted to the applicant decide whether to be subjected to conditions imposed by the pre-written contractual clauses set forth by financial institutions. In order to resolve whether to enter into a contract it is necessary that the individual understands its provisions. No sooner, will one realize difficulties that may be faced by the elderly and illiterate consumer, who do not have the means to know and understand, by himself, the contents of the financial contract. Consumerism law requires, from the supplier, loyalty and duty to provide all information requested by the consumer as a result of the rules listed in Articles 46, 52, I to V, and 54, § 3, of the Consumer Protection Code, as well as the principle of good- faith described in articles 4 and 51, IV, of the same law. Rule and principle are complementary therein, but day-to-day reality of the elderly and illiterate shows that the effectiveness of these rules is greatly compromised. Lack of complete information to the elderly and illiterate consumer compromises the free exercise of their expression of will, since it is not backed by the essential elements laid down by the contract. The focus of this work lies in the fact of asserting the necessity of the applicant or consignor to understand the clauses that he/she will be subject to. In other words, there is a need for an element that qualifies at will, making it a conscious one. This may be accomplished through the aid of a body constitutionally devised to defend the rights, with inalienable social and individual relevance. The Public Ministry, an entity constitutionally created to defend fundamental rights, has the duty to promote preventive measures to safeguard the interests of elderly and illiterate consumers. Prevent the occurrence of disputes and ensure the elderly and illiterate that his/her will is free is responsibility to be undertaken by the Public Ministry. This function of preventing conflicts and preserving the will of elderly and illiterate consumers can be widely exercised by signing terms of adjustment of conduct by Public Ministry and the banks, but also thorough information given to the elderly and illiterate consumers by the parquet member, about the content of the contract / A autonomia privada nos contratos de empréstimo pessoais fica restrita ao aderente decidir entre sujeitar-se ou não às condições impostas por meio das cláusulas contratuais pré-redigidas pelas instituições financeiras. Ocorre que para decidir entre realizar ou não um contrato é necessário que o sujeito compreenda suas cláusulas. Logo se percebe a dificuldade enfrentada pelo consumidor idoso e analfabeto, que não dispõe de meios para, sozinho, conhecer e entender o conteúdo do contrato financeiro. A legislação consumerista exige do fornecedor lealdade e dever de prestar todas as informações solicitadas pelo consumidor como decorrência das regras elencadas nos artigos 46, 52, I a V e 54, §3º, todos do Código de Defesa do Consumidor e do princípio da boa-fé descrito nos artigos 4º e 51, IV, do mesmo diploma legal. Regra e princípio aqui se completam, mas a realidade do dia a dia a que o idoso e analfabeto é submetido mostra que a eficácia dessas regras está bastante comprometida. A ausência de informação completa ao consumidor idoso analfabeto compromete o livre exercício de sua manifestação de vontade, uma vez que não é lastreada nos elementos essenciais que circundam o contrato. O ponto central deste trabalho está no fato de se perquirir sobre a necessidade do aderente ou consignante compreender as cláusulas que o sujeitarão, isto é, na exigência de um elemento que qualifique a vontade, tornando-a um querer consciente, mediante o auxílio de um órgão pensado constitucionalmente para defender os direitos com relevância social e individuais indisponíveis. O Ministério Público, entidade constitucionalmente criada para defender os direitos fundamentais, tem a atribuição de promover ações preventivas no sentido de salvaguardar os interesses do consumidor idoso e analfabeto. Prevenir a ocorrência dos litígios e garantir ao idoso e analfabeto que sua vontade seja livre é atribuição a ser assumida pelo Ministério Público. Essa função preventiva de conflitos e de preservação da vontade do consumidor idoso e analfabeto pode ser amplamente exercida por meio de assinatura dos termos de ajustamento de conduta pelo Ministério Público e as entidades bancárias, mas também com a ampla informação, pelo membro do parquet, do consumidor idoso e analfabeto sobre o conteúdo do contrato

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Akerlof (1970) 肇端了資訊經濟學的發展，而 Leland & Pyle (1977)，Ross (1977) 和 Bhattacharya (1979) 等正式將資訊經濟學帶入財務研究的領域後，資訊不對稱的重要性日益受到重視，且已對傳統財務理論產生很大的衝擊，但是關於資訊不對稱的研究僅偏重於均衡條件的探討，對於如何影響風險性資產的價格以及影響程度則未見系統性研究．而且資訊不對稱的程度很難具體衡量，因此此一議題鮮見實證探討．本研究即將資訊不對稱正式納入風險性資產定價模式，並以銀行借款為實證對象，利用共變結構模型找出資訊不對稱的衡量變數，對資訊不對稱程度加以衡量．本研究在理論模式的建構，分別以一般競爭均衡，利率結構，選擇權定價，與銀行借款信用評等等四個定價模式，將資訊不對稱正式納入各模式中，推導其對價格的影響．四個不同模式均獲致相同結論：資訊不對稱使債權人的認知風險高於完全資訊時的實質風險，致使借款人資金成本上升．利用LISREL為資訊不對稱界定出一組配適良好的衡量模式，包括借款企業的年齡，規模，保證人人數，以及與銀行往來期間等四項變數．實證結果顯示，資訊不對稱對借款者的償債能力．理論模式與主要研究命題獲實證結果支持．

本文包含兩篇文章，分別探討國際市場公司改名對企業股價與借款成本的影響。從本文的實證分析結果得知，國際市場公司改名對公司股票價格與其貸款成本有截然不同的影響。 Cooper, Dimitrov and Rau (2001)與Cooper et al. (2005)發現當網際網路興盛時，不論公司業務主體是否與網際網路有關，於公司名稱加入與網路有關文字之公司其股價報酬上升且維持一段時間；然而，當網際網路衰弱時，將公司名稱刪除網路字樣之公司，其股價出現顯著異常報酬，使得股東財富增加。鑒於近年來國際石油價格急遽上升，之後又逢美國次級房貸風暴因而暴跌，國際石油價格的波動走勢提供本文第一篇文章之研究動機。本文第一篇文章的研究目的在於探討當國際石油價格持續上升時，國際市場公司是否傾向變更其公司名稱，將其公司名稱加入「石油」或「原油」等相關之文字，透過公司名稱的變更提高企業價值；而當國際石油價格急速下降時，國際市場公司是否反而傾向將其公司名稱刪除「石油」或「原油」等相關之文字，以防止股價下跌。此外，由於美國與加拿大地理位置與文化相近，過去文獻常將兩者作比較。顧此，本文進一步探討美國公司與加拿大公司更名對企業股價的影響是否有顯著地差異。 本文發現當國際石油價格上漲時，美國公司傾向將其公司名稱加入「石油」或「原油」等相關之文字且其股價報酬上升，企業價值增加。然而，當美國次級房貸風暴時期，投資人深恐石油產業將受美國次級房貸危機影響，因此變更公司名稱之公司其股價下跌。另外，本文發現由於近年來加拿大為世界主要石油輸出國之一，投資人對石油產業公司的了解度較佳，因此美國與加拿大公司更名對企業股價有不同的影響。 過去文獻主要以股東角度探討公司更名議題，本文第二篇文章主要從銀行貸款者的角度來探討公司更名的影響。本文認為公司更名提高貸款者與借款者之間的資訊不對稱，增加銀行貸款者評估借款者未來還款能力的不確定性。為了要降低不確定性帶來的財務風險，銀行貸款者傾向提高借款利息或增加要求抵押擔保品。本文發現在公司更名後，公司須負擔較高的借款成本、較多的抵押品擔保與合約限制。此外，公司更名後，願意加入聯合貸款的銀行數目降低。 這些實證結果支持本文的推論。在股票市場上，公司變更公司名稱對企業價值有顯著地影響，管理階層藉由變更公司名稱影響投資人對其的看法(investor sentiment)，進而提高股票價值。然而，在借貸市場上，公司變更名稱提高公司與貸款者間之資訊不對稱，公司更名須償付較高的借款成本和較多的抵押品擔保。本文的實證結果說明金融機構對公司治理具有監督和管理的重要角色。 / Two essays are comprised in this dissertation to examine the benefits and costs of corporate name changes. The empirical investigation on corporate name changes in stock market and loan market provide the entirely different insights on the effect of corporate name changes. With the recent oil price in surge and then crash, I have the opportunity to examine whether firms have the incentives to changes their names when oil price surge. In the first essay, I examine the wealth effect of corporate name changes involving oil-related terms. Following Cooper, Dimitrov and Rau (2001) and Cooper et al. (2005), I argue that firms tend to change their name by adding the words “oil” or “petroleum” to names when oil price in surge, while deleting the words “oil” or “petroleum” to names when oil price in a crash. I also compare the effect of corporate name changes between U.S. and Canadian stock market. Consistent with the prediction, I provide the evidence that there exists valuation effect of corporate name changes involving oil-related terms in U.S. stock market when the recent oil price surge. When financial crisis exploded U.S. stock market reacts significant negatively to corporate name changes. This is perhaps because investors expect economic difficulty caused by the financial crisis, which in turn, would hurt the oil industry and high oil price is not expected to be sustainable. On the contrary, relative to U.S. market, Canadian stock market has little reaction on the corporate name changes regardless of the type of name changes or market condition. This opposite results can be attributed to the different economic structure between U.S. and Canadian market. In the second essay, I focus on the effect of corporate name changes from the perspective of bank loan holders. I examine the cost of corporate name changes in the loan contracting. A corporate name changes creates information asymmetry and uncertainty about the future cash flow of a firms. To reduce the increase of credit risk, bank loan holders would attempt to enhance the efficient monitoring by tighter contracting terms and more concentrated lending structure. Consistent with this argument, the empirical results show that loan after name changes have significantly higher loan spread, higher probability of being secured, more general covenant restrictions and fewer lenders participate in a syndicated loan. Following Wu (2010), I categorize corporate name changes into different types of name changes and examine whether there is different effect among different types of name changes. I find that firms experiencing radical name changes are more likely to bear more financing costs. Lastly, I provide the evidence that firms pay higher borrowing costs when investors experience a significantly positive reaction from stock market through cosmetic name changes, which illustrate the importance of banks playing the role of monitoring and controlling borrowers.

The dissertation proposes three approaches for financial risk management. In the first topic, we investigate the stock return and risk of financial holding companies via Markov regime-switching model. The model reduces the disadvantage of traditional linear model, which disregard information of another regime if there exist structural change during the estimation periods. The empirical result shows that all financial holding companies have different stock risk between state 0 and state 1. Moreover, stock risks of all financial holding companies are significant lower after listing. That is, financial holding companies have diversification benefits after listing. In the second topic, we gauge the credit risk of guarantee issue in a bills finance company in Taiwan by a market-based model. Since bills finance companies engage in short-term loans, we renew the contract that can extend short-term loans to mid-and long-term loans. We find that the recovery rate, different industries and business cycle have significant impact on the credit risk of the bills finance company. In the third topic, we relax the assumption of Jarrow, Lando and Turnbull (1997), and propose an elaborate model to gauge the credit risk of Taiwanese bank loans. The empirical result indicates that the credit risk is heavily reliant on the recovery rate. Therefore, collateral value check procedure is very important, which has been found in previous topic. On the other hand, we find that the credit risk management is indifferent between banks participated in financial holding companies and others. That is, banks do not have better credit risk management if take part in financial holding companies. In conclusion, we expect approaches of the dissertation will be helpful for Taiwan¡¦s financial institutions to rise to the challenge of financial risk in the future.

This dissertation considers the failure of the Japanese government from 1991 through late-1998 to take measures to bring swiftly under control the threat to the nation's finance system posed by nonperforming loans that arose with the collapse of the late-1980s land-price bubble. While some works plausibly argue that this record of delay, and a larger failure of the Japanese state to adjust its general economic policy strategy, can be attributed largely to a progressive fracturing of a 1950s consensus on basic economic policy objectives between relatively internationally competitive firms and firms more dependent on state protection of their business opportunities, this insight has led few scholars to enquire into the role played by advocates of the policy interests of Japan's most competitive large firms in producing the widely lamented policy of delay on nonperforming loans. Counter to the literature's preponderant emphasis on political pressure from protection-dependent firms as impediment to swift state adjustment to nonperforming loans and other economic policy challenges of the late-20th century Japanese state, this dissertation finds that state officials and expert commentators who in debates on nonperforming loans and closely related policy issues strongly advocated dismantling protections on which large numbers of firms depended and in their stead adopting policies more favorable to the firms best able to weather the harsh economic conditions of the 1990s, displayed willingness to tolerate further delay comparable to (and sometimes greater than) that shown by state officials and expert commentators who advocated greater solicitude for the protection-dependent. This finding is based chiefly on a reading of official Ministry of Finance policy statements, transcripts of hearings of relevant Japanese House of Representatives committees, public opinion polls, reporting and commentary published in two national-circulation and two local Japanese newspapers, and a variety of books and longer articles published in the mass-audience Japanese business press. This finding, I argue, suggests a need for more sustained critical analysis of the role of leading business interests in Japan's political processes, which in turn argues for a closer engagement than is now commonly attempted with the work of Karl Marx and Chalmers Johnson, and for following up some preliminary suggestions in the existing literature of an emergent economic policy dimension of Diet party competition. / text

As a result from the latest financial crisis, the banking industry has undergone major modifications during the last years in order to limit banks’ risks. A vast majority of existing literature tends to focus upon credit risk evaluation methods and techniques mainly concerning quantitative measures and large companies. Thus, the lack of research regarding credit risk evaluation of SMEs is profound, especially considering Sweden. With the dominant market share of SMEs compared to large corporations the authors found it interesting to further explore this area of the credit assessment process as SMEs largely impact the Swedish business sector.   The purpose of the thesis at hand is to explore and provide empirical evidence of which criteria banks assess when evaluating credit risk of SMEs in Sweden. In regards to the purpose the authors have chosen to adapt the perspective of the banking industry throughout the thesis. In order to bridge the research gap the following question was established, “How do banks evaluate credit risk of SMEs in Sweden?” In light of the lack of research regarding qualitative assessment of credit risk, the authors found it interesting in terms of developing new theoretical and practical knowledge to establish the following sub-question, “What are the qualitative criteria used by banks when evaluating credit risk of SMEs in Sweden?” Further, as existing literature mainly focus on large companies the authors found it interesting to compare the findings regarding credit risk evaluation on SMEs to the evaluation process of one of the largest credit rating agencies. As a result the second sub-question was established as following, “Are these criteria similar to the criteria used by Standard & Poor’s in their rating model?” These questions were conducted in order to provide the authors and the reader with further insight regarding the criteria used by banks in their evaluation process.   An inductive approach was adopted, in line with the epistemological stance of interpretivism and the ontological belief of constructivism. With this in mind, the authors of the thesis conducted a qualitative exploratory research employing narrative interviews in order to collect the data needed, as of the lack of existing research to address the research questions.   The results of the research were that the criteria used in the assessment of credit risk tend to alter from advisor to advisor. The most commonly used criteria by the advisors are budget, business plan, customer’s customers, internal and external discipline, financial statements, industry specifics, historical accounts, key individuals, relationship, repayment capacity and the owner/individual. It was discovered that the qualitative criterion of assessing the individual majorly impacts the credit risk evaluation. However, what matters in the end is the overall impression of both qualitative and quantitative measures of the firm.   In regards to sub-question one, the authors established a list of qualitative criteria used by advisors in their credit risk evaluation of SMEs, the most widely used criteria among the advisors are the owner/individual, key individuals, internal discipline, industry specifics, external discipline, customer’s customers, relationship and business plan. In comparison with the criteria used by Standard and Poor’s and the banks, it was evident that the criteria used in the evaluation differed a lot between the two.