Modelling probability of SME dafaulting loan payments

ISBN-13: 9783330045415 / Angielski / Miękka / 2018 / 60 str.

Liberty Munashe Fungurai; Tan Zhongming

Opis

This study focuses on modelling the probability of Small to Medium Enterprises (SMEs) defaulting payment in the event of them receiving loans.Under investigation were the factors that affect both default and survival of businesses since the default probability was based on survival analysis. Data drawn was analyzed using Cox Regression, a semi-parametric survival technique whose aspects of hazard and survival functions were a base for the analysis.The results interpreted on the basis of the fitted hazard ratios and overall Cox Proportional Hazards Model indicated that there is an inverse relationship between probability of survival and that of default. As reflected by the outcome of this study, businesses that have more time in operation are less likely to default payment. Entrepreneurs pee-possessing self-employment, work experience and training qualifications, have a positive impact on survival of the businesses they are to start and run. In addition,the size of a loan and location of a business have no significant effect on the hazard(risk) associated with lending to SMEs.

O autorze

Fungurai, Liberty Munashe
I am a young man from Zimbabwe. Born in a family of 5, me being number 3. My passion for business started at such a young age and thats what made me focus on business accounting in high school. Later went to Chinhoyi University to study Business for my bachelors. Currently i am based in China,studying towards my MSc Applied Economics.