• Studied 700 SMEs in Slovakia between Jan 200-June 2005
  • Default rate was 6%
  • Conditional default probabilities (or marginal mortality rates) are hump shapes with the highest rate at 3 years after credit approval
  • Default rate differs from industry. Highest in Agriculture from Slovenian Loans
  • Default rate much lower for natural persons than for legal bodies
  • Lower profitability and lower liquidity increase default risk
  • Indebtness increases default risk
  • Altman (1989) proposes a mortality rate approach to measuring the risk of bonds according to their maturity and proposes to use I to bank loans (200). Claims it is a more appropriate indicator for the risk assessment than simple average default rates
  • Marginal mortality rates show that the loans are relatively safer in the first year after issue. However risk lending increases if the loan is not repaid with two years after issue
  • Large loans in agriculture have a much higher default probability than in any other sectors in Slovakia Modèles Hédonistes