Impact of borrower's credit rating on lending decisions of financial institutions in Pakistan


Yasir Hussain


Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

Spring 2018

Project Type

MBA Executive Research Project

Access Type

Restricted Access


Financial institutions -- Pakistan | Financial institutions--Management | Credit lending

Executive Summary

This research has been carried out with the main aim to find out the impact of a borrower's credit rating on the lending decisions which are taken by the financial institutions operating in Pakistan. There are only limited studies that focus on studying credit rating procedure and effectiveness of credit rating in Pakistan and there is no study, as per the knowledge of researcher that shows how credit rating affect the lending decision of financial instructions in Pakistan. This study is thus set to show the relationship between credit rating and lending decisions of banks in Pakistan and thereby stressing upon the need and importance of this phenomenon in financial system. The primary data of this research are in accordance to the past researches which shows that there is a strong interdependence among borrower's credit rating and lending decisions of Financial Institutions in Pakistan. Moreover, the results of regression have also shown that there is a significant impact of borrower's credit rating and lending decisions of the financial institutions. In order to collect data in this regard, the researcher has selected quantitative design. The instrument for data collection which has been used for this research is questionnaire. The questionnaire was filled by total 100 respondents sampled with the help of ease and convenience of the researcher. The respondents included banks, financial institutes, credit rating agencies, and subject experts. Moreover, the researcher has also carried out regression analysis for the purpose of finding out the impact of borrower's credit rating on the lending decision of financial institutions of Pakistan. For qualitative data analysis techniques this study used thematic analysis to analyse interview transcripts.

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