Credit Access for Small and Medium Firms: Survey Evidence for Ireland
AbstractThe extension of credit to SMEs in Ireland has been identified as a necessary condition for economic recovery and job growth. The debate on whether the reduction in credit to this sector is caused by credit rationing by banks or a lack of credit demand on the part of SMEs has received much attention in media and policy circles. Owing to a lack of relevant available micro-data, research on this issue in Ireland has been sparse to date. The aim of this paper is to provide evidence using recently available firm-level data from the Central Statistics Office and the European Central Bank. Using the CSO data, we find a moderate decline in credit applications, coupled with a very large increase in credit rejection rates. Using firm-level production data, we find no evidence that the accepted firms have been pooled according to firm performance - more productive and fast-growing firms are as likely to be rejected as any other firm. Using the ECB data, we show that Irish firms are 15 to 18 percent more likely to be rejected for credit than a comparable Eurozone SME. We show also that Irish firms are less likely to have had decreased credit demand than other Eurozone SMEs in the 2009-10 period.
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Bibliographic InfoPaper provided by Central Bank of Ireland in its series Research Technical Papers with number 11/RT/11.
Date of creation: Nov 2011
Date of revision:
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-ENT-2011-12-13 (Entrepreneurship)
- NEP-SBM-2011-12-13 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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