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Sustainability 2017, 9(9), 1588; doi:10.3390/su9091588

A Credit Scoring Model for SMEs Based on Accounting Ethics

Department of Information & Industrial Engineering, Yonsei University, 50 Yonsei-ro Seodaemun-gu, Seoul 03722, Korea
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Received: 19 July 2017 / Revised: 24 August 2017 / Accepted: 5 September 2017 / Published: 6 September 2017
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Abstract

Various types of government credit guarantee programs exist for small- and medium-sized enterprises (SMEs). The SMEs guaranteed by these programs can resolve their financial difficulties by obtaining loans from banks or being included in a pool for the issuance of primary collateralized bond obligations. However, the loan default rate for these supported firms is high owing to their moral hazard, which can be associated with unethical behavior in the accounting process. Since the stakeholders of credit guarantee programs initiated by the government include not only lenders and borrowers, but also taxpayers, the default risk of moral hazard must be minimized. Thus, an additional evaluation step is required to deal with accounting ethics, which has not thus far been considered in the literature. In this study, we propose an accounting ethics-based credit scoring model as a complementary approach, which can be used to select suitable borrowers. The proposed model is expected to reduce the default rate resulting from the moral hazard associated with unethical accounting behaviors in the supported firms. View Full-Text
Keywords: credit scoring model; SMEs; accounting ethics credit scoring model; SMEs; accounting ethics
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Lee, B.K.; Sohn, S.Y. A Credit Scoring Model for SMEs Based on Accounting Ethics. Sustainability 2017, 9, 1588.

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