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COVID-19 and SMEs deposits with commercial banks: evidence from African economies

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  • Abdulazeez Y.H. Saif-Alyousfi

    (Department of Finance, College of Business Administration, University of Hafr Al-Batin, Hafr AlBatin, Saudi Arabia)

Abstract

This paper examines the impact of COVID-19 on Small and medium-sized enterprises (SMEs) deposits across 13 African nations from 2016 to 2022, using a seven-year dataset and Ordinary Least Squares estimator. Notably, it uncovers a significant positive link between the pandemic and SMEs deposits, indicating heightened reserves amidst economic uncertainty, potentially driven by risk mitigation or government support. Associations between gross domestic product (GDP), inflation, unemployment, foreign direct investment (FDI), exchange rates, and SMEs deposits were evident, showcasing higher GDP aligning with increased deposits, while inflation and unemployment linked to reduced ones. FDI showed a positive influence, and exchange rate fluctuations notably affected SMEs deposits, especially for those in international trade. These findings emphasize policy reconsideration for crisis strategies supporting SMEs reserves during uncertainty and interventions addressing inflation, unemployment, and exchange rate risks. Future research exploring regional nuances and global comparisons could further enrich policymaking for resilient SMEs amid evolving economic landscapes.

Suggested Citation

  • Abdulazeez Y.H. Saif-Alyousfi, 2024. "COVID-19 and SMEs deposits with commercial banks: evidence from African economies," Financial Economics Letters, Anser Press, vol. 3(1), pages 81-94, March.
    • Handle: RePEc:bba:j00007:v:3:y:2024:i:1:p:81-94:d:279
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    References listed on IDEAS

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    1. Linh Tu Ho & Christopher Gan, 2021. "Foreign Direct Investment and World Pandemic Uncertainty Index: Do Health Pandemics Matter?," JRFM, MDPI, vol. 14(3), pages 1-15, March.
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