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The Impact of the COVID19 Pandemic on the Credit Market in Poland

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  • Alina Danilowska

Abstract

Purpose: The paper aims to evaluate the impact of the COVID-19 pandemic on the credit market in Poland. Design/Methodology/Approach: The evaluation of the outcomes of the pandemic on different segments of the credit market in Poland. Findings: The pandemic of COVID-19 had a significant impact on the credit market in Poland. The rise in risk in the economy due to pandemic restrictions on economic activity prompted commercial banks to tighten their lending standards and terms. Demand for credits was affected by the drop in investment and the negative future expectations of economic agents. The central bank eased its monetary policy considerably at the beginning of the pandemic, what with the parallel decrease in credit demand caused the gradual fall in interest rates. Although hugely lower interest rates, the value of credits financing activity of enterprises and households’ consumption remained below the 2019-year level. What is worth noting, except for the first months of the pandemic, the trends in the value of the new corporate and consumption credits were like trends in the previous year. In the period December 2019 to the end of January 2021, the debt of non-financial agents in total increased by approximately 0.9%. However, it stemmed only from the growth of debt from real estate credits. The debt due to the other credits decreased. The highest drop occurred in the micro-enterprise sector. Practical Implications: Assessment of the response of credit market participants, banks and borrowers in the main segments of the credit market to challenges the economy faces due to the COVID-19 pandemic. Originality/Value: To identify and evaluate the effects of the pandemic on the credit market in Poland, the analysis of monthly data was carried out.

Suggested Citation

  • Alina Danilowska, 2021. "The Impact of the COVID19 Pandemic on the Credit Market in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 229-240.
    • Handle: RePEc:ers:journl:v:xxiv:y:2021:i:3:p:229-240
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    References listed on IDEAS

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    1. Paolo Cavallino & Fiorella De Fiore, 2020. "Central banks' response to Covid-19 in advanced economies," BIS Bulletins 21, Bank for International Settlements.
    2. Enrique Alberola-Ila & Yavuz Arslan & Gong Cheng & Richhild Moessner, 2020. "The fiscal response to the Covid-19 crisis in advanced and emerging market economies," BIS Bulletins 23, Bank for International Settlements.
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    Cited by:

    1. Andreea Maura Bobiceanu & Ioana Georgiana Fä‚Rcaè˜ & Andreea Maria Pece, 2022. "Covid Crisis Effects On Lending In The Romanian Banking Marke," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 30, pages 39-52, December.
    2. Maximiliano Gómez Aguirre & Ariel David Krysa, 2023. "Consumer Loans Dynamics in 2020 in Argentina: An Approach Using Error Correction Models," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(81), pages 111-158, May.
    3. Cyprian Chwiałkowski & Adam Zydroń & Dariusz Kayzer, 2022. "Assessing the Impact of Selected Attributes on Dwelling Prices Using Ordinary Least Squares Regression and Geographically Weighted Regression: A Case Study in Poznań, Poland," Land, MDPI, vol. 12(1), pages 1-20, December.

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    More about this item

    Keywords

    Credit market; COVID-19 pandemic; commercial banks’ credit policy; interest rate; nonfinancial sector indebtedness.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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