Risk Perception in the Presentation Style of Loan Proposals by SME Bankers

The decision-making process in banking involves considering logical analysis and psychological factors. The way information and data are presented can impact cognitive limitations and behavioral biases when making loan decisions.The study examines how the presentation style of loan proposals affects the risk perception and confidence level of SME bankers when making loan decisions. An experiment was conducted where participants reviewed a modified loan proposal and rating report in an online meeting, analysed the information, discussed it, and decided to approve the loan.The results indicate that the way the proposal is presented can introduce biases and errors in the decision-making process. To improve accuracy, the study suggests presenting the proposal clearly, namely, providing comprehensive explanations for the rating, ensuring the presenter’s mastery of the material, confirming the data’s suitability, and using an easily understandable format. This research contributes to understanding decision-making in SME banking loan approvals.