SME-bank relationship: organisation-to-organisation or person-to-person? A view from Japan

Research on the SME-bank relationship has focused on the relationship between two organisations – the bank and the firm. This study argues why it needs to be looked at between two people – the loan officer and the SME owner/manager. Among the research questions developed were the reasons for the existence of such a relationship and the form(s) it takes. Interviews with loan officers at a representative sample of Japanese banks were used to collect data. The analysis revealed the existence of such a relationship; however, due to the job rotation system prevailing in Japan, it is between the SME manager/owner and the bank. Banks build such a relationship to compensate for the lack of information about SMEs and refer to it as one of ‘trust’ and ‘mutual support’. Without adequate alternatives that are relevant to SMEs’ peculiarities, fintech has the potential to rob banks of this crucial instrument for accurately assessing SMEs’ creditworthiness.