The causal relationship between SME sustainability and banks’ risk

Datos Bibliográficos

ID15066910
AutoresFadi Shihadeh (0000-0002-7078-5216, Palestine Technical University - Kadoorie, autor de correspondencia), Sisira Kumara Naradda Gamage (0000-0002-7186-3474, Rajarata University of Sri Lanka), Azzam Hannoon (0000-0003-0468-7797, American University in the Emirates)
Año2019
Volumen32
Número1
Páginas2743-2760
Fecha de publicación2019-01-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaEconomic Research-Ekonomska Istraživanja (JOURNAL)
Identificadores de la revistaISSN: 1331-677X • E-ISSN: 1848-9664
EditorialInforma UK Limited (PUBLISHER • GB)
DOI10.1080/1331677x.2019.1655465
OpenAlexW2972330383
IdiomaEN
Citas recibidas1
Referencias 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