Financial Factors and Beyond: A Survey of Credit Risk Assessment for VSBs by Moroccan Banks

Abstract

This article analyzes the extent to which Moroccan banks adopt a holistic approach to credit risk assessment, incorporating criteria that go beyond simple balance sheets and financial ratios. To this end, Multiple Correspondence Analysis and advanced statistical techniques were employed using R software. A detailed questionnaire comprising 14 questions, was distributed to a sample of Moroccan bankers. The results of this analysis reliably confirm our initial hypotheses. They reveal a growing trend among Moroccan banks towards a more complex and nuanced assessment of credit risk. In addition to traditional financial aspects such as financial statement analysis, banks are increasingly considering non-financial criteria such as collateral requirements, quality of corporate governance, sustainability of business practices, and technological positioning. This diversified approach gives banks a more accurate and comprehensive view of a company's risk profile. It also enables them to make better-informed and more balanced lending decisions, considering the multitude of factors that can influence a company's ability to repay.