Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos

In Malaysia commercial banking practice, credit analysis for SMEs loan application involved an internal credit officers’ quantitative and qualitative decision making process. Based on the bounded rational theory, ideally, bank credit officers would be influenced by both fundamental factors and behav...

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Main Author:	Ondolos, Nigel Kollin
Format:	Thesis
Language:	English
Published:	2022
Subjects:	Small and medium-sized business History
Online Access:	https://ir.uitm.edu.my/id/eprint/76765/1/76765.pdf
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id	my-uitm-ir.76765
record_format	uketd_dc
spelling	my-uitm-ir.767652023-04-18T02:40:38Z Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos 2022 Ondolos, Nigel Kollin Small and medium-sized business. History Bank loans. Bank credit. Commercial loans In Malaysia commercial banking practice, credit analysis for SMEs loan application involved an internal credit officers’ quantitative and qualitative decision making process. Based on the bounded rational theory, ideally, bank credit officers would be influenced by both fundamental factors and behavioural factors in their credit assessment and decision making process. While the fundamental factors are widely acknowledged, the behavioural factors are under-researched. This research aims to study the fundamental and behavioural factors determining bank officer credit decision for SMEs lending in Malaysia using the theoretical lenses of behavioural finance. Analyses are conducted using hierarchical multiple regression as a main analysis. In addition, multiple linear regression and mean centered approach are performed as robustness analysis. In finding ways to reduce behavioural biases, the moderating role of human capital factor on the relationship between behavioural factors on behavioural credit decision are examined. The data for the study were obtained from survey involving 161 bank credit officers in development financial institutions and commercial bank. The selected sampling technique adopted for this study is non-probability combining quota and purposive sampling technique. Hierarchical multiple regressions was used to examine the relationship between the fundamental factors, behavioural factors and human capital factors on bank officers’ credit decision for SMEs lending. The analyses also been control by gender and age. On the fundamental factors assessment, regression results showed that character and condition are positively significant related to the fundamental credit decision making. On the behavioral factors assessment, intuition, overconfidence and loss aversion are positively significant related to the behavioural credit decision making. On the interaction analysis, the findings indicate that; (i) credit experience is negatively significant in moderating intuition and overconfidence influence on behavioural credit decisions; (ii) emotional intelligence is negatively significant in moderating intuition, loss aversion, optimism, and overconfidence influence on behavioural credit decisions. Overall, the findings of this study would be valuable in enhancing the SMEs lending theory, policy and practice. 2022 Thesis https://ir.uitm.edu.my/id/eprint/76765/ https://ir.uitm.edu.my/id/eprint/76765/1/76765.pdf text en public masters Universiti Teknologi MARA (UiTM) Faculty of Business and Management Tuyon, Jasman
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Tuyon, Jasman
topic	Small and medium-sized business History Small and medium-sized business History
spellingShingle	Small and medium-sized business History Small and medium-sized business History Ondolos, Nigel Kollin Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
description	In Malaysia commercial banking practice, credit analysis for SMEs loan application involved an internal credit officers’ quantitative and qualitative decision making process. Based on the bounded rational theory, ideally, bank credit officers would be influenced by both fundamental factors and behavioural factors in their credit assessment and decision making process. While the fundamental factors are widely acknowledged, the behavioural factors are under-researched. This research aims to study the fundamental and behavioural factors determining bank officer credit decision for SMEs lending in Malaysia using the theoretical lenses of behavioural finance. Analyses are conducted using hierarchical multiple regression as a main analysis. In addition, multiple linear regression and mean centered approach are performed as robustness analysis. In finding ways to reduce behavioural biases, the moderating role of human capital factor on the relationship between behavioural factors on behavioural credit decision are examined. The data for the study were obtained from survey involving 161 bank credit officers in development financial institutions and commercial bank. The selected sampling technique adopted for this study is non-probability combining quota and purposive sampling technique. Hierarchical multiple regressions was used to examine the relationship between the fundamental factors, behavioural factors and human capital factors on bank officers’ credit decision for SMEs lending. The analyses also been control by gender and age. On the fundamental factors assessment, regression results showed that character and condition are positively significant related to the fundamental credit decision making. On the behavioral factors assessment, intuition, overconfidence and loss aversion are positively significant related to the behavioural credit decision making. On the interaction analysis, the findings indicate that; (i) credit experience is negatively significant in moderating intuition and overconfidence influence on behavioural credit decisions; (ii) emotional intelligence is negatively significant in moderating intuition, loss aversion, optimism, and overconfidence influence on behavioural credit decisions. Overall, the findings of this study would be valuable in enhancing the SMEs lending theory, policy and practice.
format	Thesis
qualification_level	Master's degree
author	Ondolos, Nigel Kollin
author_facet	Ondolos, Nigel Kollin
author_sort	Ondolos, Nigel Kollin
title	Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
title_short	Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
title_full	Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
title_fullStr	Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
title_full_unstemmed	Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos
title_sort	fundamental and behavioural factors determining bank officers’ credit decision for sme lending in malaysia / nigel kollin ondolos
granting_institution	Universiti Teknologi MARA (UiTM)
granting_department	Faculty of Business and Management
publishDate	2022
url	https://ir.uitm.edu.my/id/eprint/76765/1/76765.pdf
_version_	1783736121387122688

Fundamental and behavioural factors determining bank officers’ credit decision for SME lending in Malaysia / Nigel Kollin Ondolos

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