Modelling credit risk for small and medium-sized enterprises (SMEs)
Yiling Yan

BI Norwegian Business School, Nydalsveien 37, Oslo,Norway，0424；

Abstract: SMEs are vital to the global economy yet encounter significant financing constraints. This study analyzes 5 years of data from 3,040 SMEs using 33 annual financial indicators, dummy variables, and logistic regression. The results yield a universally applicable and accurate credit risk assessment equation. Key determinants of SME default include stock turnover, collection period, credit period, solvency ratios, gearing, operating revenue per employee, employee cost ratios, average employee cost, working capital per employee, total assets per employee, current liabilities, cash equivalents, and operating revenue. This model enables banks and creditors to effectively evaluate SME credit risk, thereby facilitating SME financing and promoting mutually beneficial outcomes.

Keywords: Small and medium-sized enterprises (SMEs)；credit risk；default

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