Abstract—Making the decision to extend the right amount of money to the right Borrower at the right time became extremely significant for the Banks in today’s world. This paper attempts to comprehend the factors taken into consideration in credit lending to large corporations and also to observe whether or not relationship lending exists in the Turkish Corporate Banking system. 2 focus groups and 3 in-depth interviews are conducted as part of the qualitative research; as a result of which a scale is developed, which has been sent as a questionnaire to bankers in Turkey; the outcome of which has been analyzed with factor analysis in SPSS. The results obtained from this study suggest that in the Corporate Banking world, in the process of extending credit to large institutions; bankers take into consideration the inherent risks involved, the relationship with the Borrower, Soft Information on the Borrower, the Borrower’s business cycle and finally the business model. To conclude, in line with the expectations of the researcher, “relationship” has been found to be one of the significant factors taken into consideration in credit lending in Turkey.

Index Terms—bank lending criteria, relationship lending, credit process, corporate banking

Cite: Seda Erdoğan, "Bank Lending Criteria and Relationship Lending," Journal of Advanced Management Science, Vol. 2, No. 3, pp. 220-227, September 2014. doi: 10.12720/joams.2.3.220-227