Non-traditional factors influencing the commercial banks lending decision to small and medium-sized enterprises (SMEs)‎ in Jordan

Abstract EN

Small and medium-sized enterprises SMEs face considerable difficulties in obtaining sufficient funds from external sources especially from commercial banks.

The aim of this paper is to examine the effect of borrowers'demographic nature and firms characteristics (non-traditional factors) on the commercial banks' lending decision to SMEs.

This is to our knowledge the first time such relations are to be examined in the context of developing countries.

The methodology for the study is based upon a survey of 142 Jordanian firms that have applied for loans to the commercial banks.

The main findings suggest that the commercial banks concentrate only on the factors that reflect the firms' solidity such as gender, experience, position and the sector that the firm works in.

These factors reflect the ability of these firms to provide the banks requirements.