Default Rates in the Loan Market for SMEs

Fidrmuc, Jarko; Hainz, Christa und Malesich, Anton (Januar 2007): Default Rates in the Loan Market for SMEs. Evidence from Slovakia. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2007-1

Abstract

Banks entering an emerging market face a lot of uncertainty about the risks involved in lending. We use a unique unbalanced panel of nearly 700 short-term loans made to SMEs in Slovakia between January 2000 and June 2005. Of the loans granted, on average 6.0 per cent of the firms defaulted. Several probit models and panel probit models show that liquidity and profitability factors are important determinants of SMEs defaults, while debt factors are less robust. However, we find that above average indebtedness significantly increases the probability of default. Moreover, the legal form that determines liability has important incentive effects.

• Dokumententyp: Paper
• Keywords: SME, Credit, Loan Default, Mortality Rates, Incentives, Probit, Panel Data
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Komparative Wirtschaftsforschung
• Themengebiete: 300 Sozialwissenschaften > 300 Sozialwissenschaft, Soziologie ; 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: G33, G21, C25
• Sprache: Englisch