SMEs’ soft information and credit rationing in France

Article type: Research Article

Authors: Smondel, Aymen^{; *}

Affiliations: Université Côte d’Azur, IAE, GRM, Nice, France

Correspondence: [*] Corresponding author: Aymen Smondel, “Université Côte d’Azur”, IAE, GRM, Nice France. 24, Avenue des diables bleus, Nice 06357, France. Tél.: +0033489152140; E-mail: aymen.smondel@unice.fr.

Abstract: The decision-making processes seen in business enterprises and other social organizations, often entail soft data and information. Such is a situation regarding the banking industry in France, where soft information plays a vital role in the decision-making processes that grant credit to small and medium enterprises (SMEs). This article assesses how soft information reduces SMEs credit rationing. Based on a questionnaire sent to SMEs’ in France, the study’s sample consists of 296 companies that had applied for credit. The results show that the integration of soft information into the bank’s decision-making process can significantly reduce SMEs credit rationing. Scores tend to replace bankers and their analysis. Nevertheless, this article points out the importance of information resulting from relationships not considered in ratings. More generally, this work motivates organizations to use computerisation as complementary tools and not as substitute to human experience.

Keywords: Credit rationing, SMEs, bank-SME relationship, soft information

DOI: 10.3233/HSM-17180

Journal: Human Systems Management, vol. 37, no. 2, pp. 169-180, 2018