Credit risk and firm performance

  • Does credit risk affect capital structure and firm performance link?

    Further, it is noted that efficient capital structure decisions are affected by firms likeliness of facing more or less credit risk, as a result, it may have an effect on firms' utilization of resources and, ultimately, overall growth.Dec 11, 2020.

  • How does credit risk impact a company?

    Credit risks boil down to clients that could hurt your business by not being able to pay.
    A credit risk could be a small account with poor credit and the potential to go out of business, or a credit risk could be a large account with high concentration that could end your business if they go insolvent..

  • How risk management impact firms financial performance?

    Risk management helps in adding value to the firm by either reducing costs and/or increasing revenues, thus impacting the firm's financial performance..

  • What is the credit risk of a firm?

    What Is Credit Risk? Credit risk is the probability of a financial loss resulting from a borrower's failure to repay a loan.
    Essentially, credit risk refers to the risk that a lender may not receive the owed principal and interest, which results in an interruption of cash flows and increased costs for collection..

  • Risk management helps in adding value to the firm by either reducing costs and/or increasing revenues, thus impacting the firm's financial performance.
credit risk and ROA as well as between credit risk and ROE. This result suggest “Evaluation of Credit Risk Based on Firm Performance”. European Journal of 
The estimation results showed that there is a negative relationship between credit risk and ROA as well as between credit risk and ROE. This result suggest that 

Credit Surveys and Benchmarks

Our clients can participate anonymously in a wide range of surveys covering all major aspects of credit risk, including organizational effectiveness, credit processes, risk model performance, and portfolio management.
These surveys allow clients to benchmark their performance against a group of relevant peers.

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Does environmental performance affect credit risk?

Although there may exist a link between firms' environmental performance and their legal statuses ( Zhang et al., 2019 ), banks may directly use the environmental variables to assess credit risk.
Firms with great sales, in big cities, or with foreign ownership are more likely to obtain bank loans.

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Does firm size affect credit risk?

Large firms and/or mature firms have more stable financial performance and longer records, indicating lower credit risk ( Zhang et al., 2019 ).
From a bank's perspective, firm features such as:

  • the number of employees and firm age directly affect the inherent riskiness of a loan ( Asiedu et al., 2013 ).

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