Using the characteristics of small-business firms and of their owners, the information from both the joint credit information center and loan auditors, and logistic models, this study analyzes the determinants of the approval of small-business loans made by credit officers. The study also examines whether these determinants are significant in the logistic models of loan default and provide suggestions to credit officers for approving small-business loans. The main findings of this study are as follows.
1. Some specific proxy variables for the characteristics of small-business firms and of their owners and information from both the joint credit information center and loan auditors are significant determinants in the logistic models of loan approval. Their importance or significance will differ when the sample loans are categorized on the basis of sales.
2. The significant determinants in the logistic models of loan default are also significant determinants in the logistic models of loan approval. The result indicates that credit officers are able to effectively consider some factors contributing to loan default when they make loan decisions. Thus, the credit officers perform well in managing credit risk when approving loans.
3. The number of significant determinants in the logistic models of loan approval is far greater than that in the models of loan default. The finding implies that credit officers may place more stringent criteria in approving loans and lose some profitable business opportunities.
4. Establishing different criteria on the basis of sales when approving loans can facilitate the increase in the rate of loan approval and decrease in the rate of loan default.
5. The information from loan auditors plays an important role in the approval of loans to firms with small sales. It seems not to be the case in the approval of loans to firms with large sales. Therefore, it is better that loan auditors be equipped with abundant knowledge of various industrial sectors and be given well on-job training. Moreover, the performance of loan auditors should be independent with the number or size of loans.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0709108-235132 |
| Date | 09 July 2008 |
| Creators | Chen, Hsuan-Ching |
| Contributors | Pei-how Huang, Ying-Chun Li, Yeh, Kuang S. |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0709108-235132 |
| Rights | not_available, Copyright information available at source archive |
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