The Role of Human Capital in Loan Officers’ Decision Policies

Using a human–capital perspective and the similarity–attraction paradigm, we examine the role of general and specific human capital in the decision policies of 114 Swedish loan officers in their assessments of small–business loan requests. We found that human capital characteristics had marginal impact on decision policy contingencies and that specific human capital had no significant influence on the probability of loan approval. However, we did find that the similarity between the loan officers’ human capital and the applicants’ human capital was a significant indicator of loan approval. The findings offer interesting insight into the heterogeneity of loan decision processes and outcomes and future research opportunities are suggested.