Technology credit scoring and rating for technology financing of SMEs

다국어 초록 (Multilingual Abstract)

In this research, new methodologies for technology credit scoring and rating for technology financing of SMEs are proposed. In terms of the issues, five topics presented for effective management of technology financing for innovative SMEs and venture business are as follows:Topic 1. Improved Technology Scoring Model for Technology Credit Guarantee FundIn Korea, liquidity problem is a major setback for many small and medium companies with great degree of growth potential in technology. In order to support such companies, Technology Credit Guarantee Fund has been established. A credit guarantee is given to the companies which obtained a high score by a technology evaluation model so that they can get loan from the several financial institutes. Therefore critical loss would occur when an inadequate evaluation model is used. In this study, we examine the existing scoring model with many attributes and provide an improved version which eliminates the multicollinearity.Topic 2. Technology Credit Scoring Model Considering SME Characteristics and Economic ConditionsIn order to support small and medium enterprises (SME) with a high degree of growth potential in technology, many forms of credit guarantees are issued to the companies which obtain high scores by a technology scorecard. However, their default rates are reported to be very high. We propose a new technology evaluation model which considers not only technology related factors but also environmental factors such as enterprise characteristics and economic conditions. We then show the superior prediction ability of the proposed model to the existing one. This model also enables to do a stress test by applying some worst environmental situations and is expected to be used to obtain valuable information for the effective management of the various technology funds for SMEs.Topic 3. Technology Scoring Model for Reflecting Evaluator's Perception within Confidence LimitsThe main purpose in this topic is to propose a new technology scoring model for reflecting the total perception scoring phenomenon which happens often in many evaluation settings. A base model used is a logistic regression for non-default prediction of a firm. The point estimator used to predict the probability for non-default based on this model does not consider the risk involved in the estimation error. We propose to update the point estimator within its confidence interval using the evaluator's perception. The proposed approach takes into account not only the risk involved in the estimation error of the point estimator but also the total perception scoring phenomenon. Empirical evidence of a better prediction ability of the proposed model is displayed in terms of the area under the ROC curves. Additionally, we showed that the proposed model can take advantage when it is applied to smaller data size.Topic 4. Case Based Reasoning for Predicting Multi-Period Financial Performances of Technology-based SMEsRecently, various types of technology funds became available to support the programs for technology development and commercialization of SMEs (Small and Medium Enterprise) in Korea. However, the potential financial performances have not been sufficiently considered at the selection stage of fund recipient SMEs whereas the default risk has been a major concern. This paper proposes a CBR (Case Based Reasoning) system with GA (Genetic Algorithm) for predicting the EWMA (Exponentially Weighted Moving Average) of multi period financial performances of technology-oriented SMEs. It can be applied to a wide range of technology investment related decision-making procedures.Topic 5. Technology Credit Rating System for Funding SMEsTechnology evaluation has played a crucial role in selecting and supporting companies with innovative technology. Many previous studies have focused on developing various technology evaluation methods including scorecard. However, technology credit rating has been scarcely applied in spite of its convenient usage for technology financing. In this paper, we propose various technology credit rating systems based on empirical data obtained from the technology scoring model and examine their properties.Finally, the proposed technology scoring models and rating systems are expected not only to provide valuable information for the effective management of technology credit guarantee fund but also to various technology related decision-makings such as R&D investment, alliance, transfer, and loan.