Banks in Asia can now offer better loans to small businesses.
The article examines how banks can analyze credit risk for small and medium-sized enterprises (SMEs) in Thailand using data on bank lending. By analyzing five variables, the researchers grouped Thai SMEs based on their financial health. This classification helps banks reduce information gaps, leading to better interest rates and lending limits for healthy SMEs. Ultimately, this approach can improve financing for SMEs and decrease non-performing loans in this crucial sector.