Journal of Business Ethics

, Volume 133, Issue 4, pp 691–701 | Cite as

A Credit Score System for Socially Responsible Lending

  • Begoña Gutiérrez-Nieto
  • Carlos Serrano-Cinca
  • Juan Camón-Cala
Article

Abstract

Ethical banking, microfinance institutions or certain credit cooperatives, among others, grant socially responsible loans. This paper presents a credit score system for them. The model evaluates social and financial aspects of the borrower. The financial aspects are evaluated under the conventional banking framework, by analysing accounting statements and financial projections. The social aspects try to quantify the loan impact on the achievement of Millennium Development Goals such as employment, education, environment, health or community impact. The social credit score model should incorporate the lender’s know-how and should also be coherent with its mission. This is done using Multi-Criteria Decision Making (MCDM). The paper illustrates a real case: a loan application by a social entrepreneur presented to a socially responsible lender. The decision support system not only produces a score, but also reveals strengths and weaknesses of the application.

Keywords

Ethical banking Social impact assessment Credit scoring Multi-criteria decision making (MCDM) Financial ratios 

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Begoña Gutiérrez-Nieto
    • 1
  • Carlos Serrano-Cinca
    • 1
  • Juan Camón-Cala
    • 1
  1. 1.Department of Accounting and FinanceUniversidad de ZaragozaSaragossaSpain

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