University of Twente Student Theses
Explorative Insights into Soft Information and Gut Feelings in the SME Lending Process
Bolhoeve, R.S.L. (2024) Explorative Insights into Soft Information and Gut Feelings in the SME Lending Process.
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| Abstract: | This study examines the role of soft information and the perception of loan officers in the credit evaluation process for small and medium-sized enterprises (SMEs), analyzing loan reports from a Dutch micro-lending foundation. SMEs often struggle with obtaining financing due to insufficient hard information. Through a mixed-method approach using quantitative content analysis with Latent Dirichlet Allocation (LDA) and qualitative analysis of 14,166 loan reports, this research identifies key soft information prioritized by loan officers. The analysis shows that personality traits, especially extraversion and conscientiousness, influence the perception of loan officers, and therefore the lending decision. Additionally, social capital and entrepreneurial passion are important factors in creditworthiness assessments. The study emphasizes the value of soft information in mitigating perceived risks when hard data is scarce. By enhancing our understanding of these elements, the research provides valuable insights into SME financing decision-making. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 70 social sciences in general, 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/100251 |
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