Determinants of successful access to bank loans by vietnamese SMEs: New evidence from the Red River delta
Determinants of successful access to bank loans by vietnamese SMEs: New evidence from the Red River delta
A key target of Small and Medium sized Enterprise (SME) development is facilitating their access to finance, therefore drivers in SME credit decision making by banks are important to understand in every region and country. This paper provides an empirical analysis of the factors affecting the availability and affordability of SME loans in Vietnam. We use Ordinary Least Squares (OLS) and Logit as measures for analysing results from a survey of 20 banks and 180 SMEs conducted in 2012. The results indicate that collateral and relationship lending have positive impacts on successful access. In addition, developing relationships with lenders or seeking a guarantee from a third party can help firms mitigate stringent terms and conditions for credit approvals. On the demand side, the sector where firms operate has an influence on barriers to finance. From the supply side, with various sizes and ownerships, has different perceptions about legal uncertainties and requirements in SME lending.
Access to credit, Banks, Collateral, Relationship lending, SMEs
Nguyen, S.
5ec5a644-981e-449e-906e-fa78a017cefb
Wolfe, S.
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
1 April 2016
Nguyen, S.
5ec5a644-981e-449e-906e-fa78a017cefb
Wolfe, S.
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Nguyen, S. and Wolfe, S.
(2016)
Determinants of successful access to bank loans by vietnamese SMEs: New evidence from the Red River delta.
Journal of Internet Banking and Commerce, 21 (1), [162].
Abstract
A key target of Small and Medium sized Enterprise (SME) development is facilitating their access to finance, therefore drivers in SME credit decision making by banks are important to understand in every region and country. This paper provides an empirical analysis of the factors affecting the availability and affordability of SME loans in Vietnam. We use Ordinary Least Squares (OLS) and Logit as measures for analysing results from a survey of 20 banks and 180 SMEs conducted in 2012. The results indicate that collateral and relationship lending have positive impacts on successful access. In addition, developing relationships with lenders or seeking a guarantee from a third party can help firms mitigate stringent terms and conditions for credit approvals. On the demand side, the sector where firms operate has an influence on barriers to finance. From the supply side, with various sizes and ownerships, has different perceptions about legal uncertainties and requirements in SME lending.
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Published date: 1 April 2016
Keywords:
Access to credit, Banks, Collateral, Relationship lending, SMEs
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Local EPrints ID: 413510
URI: http://eprints.soton.ac.uk/id/eprint/413510
ISSN: 1204-5357
PURE UUID: 5345d552-b18b-4fc1-a11b-fc24a93c68ac
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Date deposited: 25 Aug 2017 16:31
Last modified: 09 Jan 2022 02:44
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Author:
S. Nguyen
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