Rethinking SMEs Lending Decisions-Making: A Two-Stage Model Integrating AI and HI Approaches

Abstract

The paper proposes a two-stage creditor decision-making model that offers a new and compre-hensive approach to use both artificial intelligence and human intelligence to predict SMEs fail-ure/Success. This model includes more relevant factors and criteria than the current models and provides a more balanced and thorough assessment of the creditworthiness of SME Financing applicants, which leads to best identification of the factors influencing the performance and sustainability of this sector. Additionally, the model proposes incorporating bank management in the decision-making process to ensure that lending decisions align with the strategic objectives of the institution. This model could benefit financial institutions and bank managers by improving their lending decisions, reducing credit risks, and supporting the growth and sustainability of SMEs in the global economy. the model can be also applied to other corporate and individuals loan applicants.