Support vector machines for default prediction of SMEs based on technology credit

Hong Sik Kim, So Young Sohn

Research output: Contribution to journalArticlepeer-review

150 Citations (Scopus)


In Korea, many forms of credit guarantees have been issued to fund small and medium enterprises (SMEs) with a high degree of growth potential in technology. However, a high default rate among funded SMEs has been reported. In order to effectively manage such governmental funds, it is important to develop an accurate scoring model for selecting promising SMEs. This paper provides a support vector machines (SVM) model to predict the default of funded SMEs, considering various input variables such as financial ratios, economic indicators, and technology evaluation factors. The results show that the accuracy performance of the SVM model is better than that of back-propagation neural networks (BPNs) and logistic regression. It is expected that the proposed model can be applied to a wide range of technology evaluation and loan or investment decisions for technology-based SMEs.

Original languageEnglish
Pages (from-to)838-846
Number of pages9
JournalEuropean Journal of Operational Research
Issue number3
Publication statusPublished - 2010 Mar 16

Bibliographical note

Funding Information:
This work was supported by the Korea Science and Engineering Foundation (KOSEF) grant funded by the Korea government (MEST) (No. R01-2008-000-11003-01).

All Science Journal Classification (ASJC) codes

  • General Computer Science
  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management


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