The causal relationship between SME sustainability and banks’ risk

Dados Bibliográficos

ID15066910
AutoresFadi Shihadeh (0000-0002-7078-5216, Palestine Technical University - Kadoorie, autor correspondente), Sisira Kumara Naradda Gamage (0000-0002-7186-3474, Rajarata University of Sri Lanka), Azzam Hannoon (0000-0003-0468-7797, American University in the Emirates)
Ano2019
Volume32
Fascículo1
Páginas2743-2760
Data de publicação2019-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomic Research-Ekonomska Istraživanja (JOURNAL)
Identificadores do periódicoISSN: 1331-677X • E-ISSN: 1848-9664
EditoraInforma UK Limited (PUBLISHER • GB)
DOI10.1080/1331677x.2019.1655465
OpenAlexW2972330383
IdiomaEN
Citações recebidas1
Referências citadas53

This study aims to examine the influence of banks’ credit to SMEs on non-performing loans. Many studies find that access to financial sources has become an obstacle to the growth and sustainability of SMEs. This study uses theoretical and empirical approaches to support the study’s hypothesis. Data are presented for 15 banks in Palestine, covering the period 2006 to 2016.The study uses empirical techniques regarding to examine the relationship between the variables. Evidence shows that encouraging banks to lend more money to SMEs through the use of a guarantee fund could decrease their risk. Thus, enhancing credit to SMEs could improve the growth and sustainability of these firms. The study recommending policymakers and bank’s managers could develop their strategies according to SME’s needing. Therefore, enhancing the growth in these firms and reducing the bank’s risk. Furthermore, adopting the guarantee funds in developing countries could decrease the bank’s risk, thus lending more to SME. The value of this paper comes from the importance of SME in the economic growth and development sustainability. Therefore, there is a need to convince banks to enhance SME credit through a guarantee fund and that extending this type of credit would positively influence banks’ activities

Bank credit · Business · Credit risk · Empirical research · Financial system · Obstacle · Sustainability · Banking stability, regulation, efficiency · Corporate Finance and Governance · Microfinance and Financial Inclusion · Finance