This study aims to explore how bank credit decision-makers navigate lending decisions under uncertainty, focusing on the interaction between rational analysis and intuitive judgement. It examines how institutional incentives, personal experience and cognitive framing shape decision-making in risk-sensitive organisational contexts.
Using a qualitative design, we conducted in-depth semi-structured interviews with 15 credit professionals from Nigerian commercial banks. Thematic analysis was used to examine how lending decisions are shaped by formal risk assessment tools, subjective perceptions and contextual pressures.
The study advances a blended rational-intuition framework that conceptualises the sequential and interactive deployment of intuitive and analytical processes in credit evaluation. Relationship and account officers often act as intuitive gatekeepers, screening applications prior to formal risk assessment. This discretion, shaped by performance targets, prior loan outcomes and institutional accountability norms, significantly influences small enterprise access to credit.
The findings underscore the gatekeeping role of bank relationship and account officers in small and medium-sized enterprise (SME) lending. Banks may enhance decision-making consistency and fairness by concentrating SME assessment expertise within specialist teams and strengthening training. This would increase awareness of intuitive judgement and framing effects. The results also suggest aligning performance incentives more closely with long-term portfolio quality and improving transparency in early-stage screening decisions.
By applying dual-process theory to an under-explored domain of SME lending in emerging markets, the study advances understanding of managerial cognition in institutional financial decision-making. It challenges dichotomous views of intuition and analysis and offers a process-based framework that reflects the organisational realities of risk-sensitive lending.
