SME finance: an insight into the credit analysis conducted by banks

Abstract

The scope of this thesis is to analyse in great detail the credit analysis that banks perform on SMEs before granting bank finance. The challenges that banks face when assessing the creditworthiness of SMEs will also be discussed in great length in a section of the literature review. Furthermore, this study will also mention briefly some of the financial products that are being offered to SMEs here in Malta. Primary data was collected by making use of interviews and questionnaires. Interviews were scheduled with prominent members of management of the banks and the questionnaires were circulated amongst the relevant bank employees. By applying these two methods of data collection, it was ensured that data of high quality and diversity was collected, encompassing views on credit analysis from the perspective of front-line as well as back-office officials. The primary data linked to the secondary data collected from the relevant literature. Moreover, the primary data collected was interpreted in Chapter 4 of this dissertation.