An Analysis of Factors Affecting Credit Scoring Performance in SMEs

In small and medium enterprises (SMEs), both financial and non-financial indicators related to the company and the large shareholder have significant effects on credit scores. This study explores the hybrid nature of SME credit scoring systems by developing an SME credit scoring model with general indicators, financial indicators and intelligence indicators related to the company and the major shareholder. This study is the first to explore the effect of intelligence indicators in credit scoring. It used regression analysis to evaluate real data from 125 SMEs operating in Turkey. Of 17 independent variables, 9 had statistically significant relationships with SME credit scores. The paper includes a comprehensive discussion of the implications of these findings.