IDEAS home Printed from https://ideas.repec.org/p/cbi/fsnote/2-fs-22.html
   My bibliography  Save this paper

SME Credit Conditions in the Pandemic Recovery

Author

Listed:
  • Durante, Elena

    (Central Bank of Ireland)

  • McGeever, Niall

    (Central Bank of Ireland)

Abstract

We analyse the credit conditions facing Irish SMEs in the context of the pandemic recovery. SME trading performance has continued to improve, with turnover and profitability indicators rebounding significantly from pandemic lows. Government policy supports have been large and composed mainly of grants. These supports have provided extensive liquidity support to firms and mitigated debt overhang risks, while also likely weighing on demand in the formal credit market. New bank lending to SMEs has fallen moderately and this has been mainly driven by declines in lending to pandemic-affected sectors. SME demand for credit remains low. Credit supply indicators show little sign of stress, with loan application rejection rates remaining steady. The tapering of government supports to businesses may result in a rise in credit demand over the coming months.

Suggested Citation

  • Durante, Elena & McGeever, Niall, 2022. "SME Credit Conditions in the Pandemic Recovery," Financial Stability Notes 2/FS/22, Central Bank of Ireland.
    • Handle: RePEc:cbi:fsnote:2/fs/22
    as

    Download full text from publisher

    File URL: https://www.centralbank.ie/docs/default-source/publications/financial-stability-notes/no.2-sme-credit-conditions.pdf?sfvrsn=1cc2901d_16
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Duignan, David & McGeever, Niall, 2020. "Which firms took COVID-19 payment breaks?," Financial Stability Notes 6/FS/20, Central Bank of Ireland.
    2. Conefrey, Thomas & Hickey, Rónán & McInerney, Niall, 2021. "COVID-19 and the Public Finances in Ireland," Economic Letters 3/EL/21, Central Bank of Ireland.
    3. McCann, Fergal & McGeever, Niall & Yao, Fang, 2021. "SME viability in the COVID-19 recovery," Research Technical Papers 9/RT/21, Central Bank of Ireland.
    4. Gaffney, Edward & Greaney, Darren, 2020. "COVID-19 payment breaks on residential mortgages," Financial Stability Notes 5/FS/20, Central Bank of Ireland.
    5. Bobasu, Alina & Geis, André & Quaglietti, Lucia & Ricci, Martino, 2021. "Tracking global economic uncertainty: implications for the euro area," Working Paper Series 2541, European Central Bank.
    6. De Nora, Giorgia & O'Brien, Eoin & O'Brien, Martin, 2020. "Releasing the CCyB to support the economy in a time of stress," Financial Stability Notes 1/FS/20, Central Bank of Ireland.
    7. Ferrando, Annalisa & Mulier, Klaas, 2022. "The real effects of credit constraints: Evidence from discouraged borrowers," Journal of Corporate Finance, Elsevier, vol. 73(C).
    8. McGeever, Niall & Sarchi, Cecilia & Woods, Maria, 2020. "Irish company births and insolvent liquidations during the COVID-19 shock," Economic Letters 13/EL/20, Central Bank of Ireland.
    9. Kelly, Jane & McElligott, Rory & Parle, Conor & Sherman, Martina, 2021. "Credit Conditions for Irish Households and SMEs," Economic Letters 5/EL/21, Central Bank of Ireland.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lambert, Derek & McGeever, Niall & O'Brien, Eoghan, 2022. "Wage subsidy utilisation by Irish companies," Financial Stability Notes 8/FS/22, Central Bank of Ireland.
    2. McCann, Fergal & McGeever, Niall, 2022. "Enterprise policy issues for distressed businesses following the unwinding of pandemic supports," Financial Stability Notes 9/FS/22, Central Bank of Ireland.
    3. McCann, Fergal & McGeever, Niall & Peia, Oana, 2023. "Do non-bank lenders mitigate credit supply shocks? Evidence from a major bank exit," Research Technical Papers 9/RT/23, Central Bank of Ireland.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lambert, Derek & McGeever, Niall & O'Brien, Eoghan, 2022. "Wage subsidy utilisation by Irish companies," Financial Stability Notes 8/FS/22, Central Bank of Ireland.
    2. McCann, Fergal & McGeever, Niall, 2022. "Enterprise policy issues for distressed businesses following the unwinding of pandemic supports," Financial Stability Notes 9/FS/22, Central Bank of Ireland.
    3. Osei-Tutu, Francis & Weill, Laurent, 2023. "Individualism reduces borrower discouragement," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 370-385.
    4. Eksi, Ozan & Onur Tas, Bedri Kamil, 2022. "Time-varying effect of uncertainty shocks on unemployment," Economic Modelling, Elsevier, vol. 110(C).
    5. Ambroziak Adam A., 2022. "Forms of COVID-19 state aid by beneficiary size in Poland in 2020," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 58(1), pages 44-63, March.
    6. McGinnity, Frances & Russell, Helen & Privalko, Ivan & Enright, Shannen & O'Brien, Doireann, 2021. "Monitoring adequate housing in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT413, June.
    7. Müller, Gernot & Georgiadis, Georgios & Schumann, Ben, 2021. "Global Risk and the Dollar," CEPR Discussion Papers 16245, C.E.P.R. Discussion Papers.
    8. Faccia, Donata & Hünnekes, Franziska & Köhler-Ulbrich, Petra, 2024. "What drives banks’ credit standards? An analysis based on a large bank-firm panel," Working Paper Series 2902, European Central Bank.
    9. Breitenlechner, Max & Georgiadis, Georgios & Schumann, Ben, 2022. "What goes around comes around: How large are spillbacks from US monetary policy?," Journal of Monetary Economics, Elsevier, vol. 131(C), pages 45-60.
    10. Bertrand, Jérémie & Delanghe, Marieke & Klein, Paul-Olivier, 2023. "Does relationship lending help firms to ask for credit? European cross-country evidence," Economic Modelling, Elsevier, vol. 124(C).
    11. David Aristei & Manuela Gallo, 2024. "Green management, access to credit, and firms’ vulnerability to the COVID-19 crisis," Small Business Economics, Springer, vol. 62(1), pages 179-211, January.
    12. Luca Fare & Marcus Dejardin & Eric Toulemonde, 2023. "Bankruptcy recovery rate and small businesses' innovation," DeFiPP Working Papers 2302, University of Namur, Development Finance and Public Policies.
    13. Georgios Georgiadis & Gernot J. Müller & Ben Schumann, 2023. "Dollar Trinity and the Global Financial Cycle," Discussion Papers of DIW Berlin 2058, DIW Berlin, German Institute for Economic Research.
    14. Tihana Škrinjarić, 2023. "Credit-to-GDP Gap Estimates in Real Time: A Stable Indicator for Macroprudential Policy Making in Croatia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(3), pages 582-614, September.
    15. McCann, Fergal & Durante, Elena, 2022. "The effects of a macroprudential loosening: the importance of borrowers’ choices," Research Technical Papers 9/RT/22, Central Bank of Ireland.
    16. Kallandranis, Christos & Anastasiou, Dimitrios & Drakos, Konstantinos, 2023. "Credit rationing prevalence for Eurozone firms," Journal of Business Research, Elsevier, vol. 158(C).
    17. Áron Drabancz & Gabriella Grosz & Alexandr Palicz & Balázs Varga, 2021. "Experiences with the Introduction of a Payment Moratorium in Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 20(1), pages 5-42.
    18. Bertrand, Jérémie & Mazza, Paolo, 2022. "Borrowers’ discouragement and creditor information," International Review of Law and Economics, Elsevier, vol. 72(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbi:fsnote:2/fs/22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fiona Farrelly (email available below). General contact details of provider: https://edirc.repec.org/data/cbigvie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.