IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v12y2024i12p190-d1532412.html
   My bibliography  Save this article

The Role of Credit Consortia in the Financial Structure of Sardinian Companies During the SARS-CoV-2 Crisis

Author

Listed:
  • Marco Desogus

    (Department of Economic and Statistical Sciences, Università di Sassari, 07100 Sassari, Italy)

  • Enrico Sergi

    (Department of Economics and Business Sciences Università di Cagliari, 09100 Cagliari, Italy)

  • Stefano Zedda

    (Department of Economics and Business Sciences Università di Cagliari, 09100 Cagliari, Italy)

Abstract

In this paper, we analyzed the role of credit consortia in supporting SMEs of the Italian region of Sardinia around and during the SARS-CoV-2 pandemic crisis. Credit consortia (or credit guarantee schemes) are financial companies whose institutional role is to support small firms needing bank lending who are individually weak in the bank–firm relationship. Credit consortia are particularly relevant in Italy, where they mitigate credit restrictions for SMEs by supplying guarantees to the bank, allowing for partial coverage of potential losses, providing peer-monitoring activity, and collectively negotiating more favorable interest rates and other conditions with banks. During the SARS-CoV-2 pandemic, credit consortia had a crucial role in supporting Sardinian SMEs with guarantees and obtaining government financial support. The evolution of Sardinian companies’ financial structures during the SARS-CoV-2 pandemic shows that the confidi-supported firms have low capitalization and are financially fragile yet capable of good returns. The liquidity provided by the government during the pandemic loosened these constraints, boosting the available liquidity, which translated, in short, into higher investment and higher sales. The demographics of Sardinian companies in 2019–2022 and the volumes of loans and savings showed a strengthening of debt capital payments, increased collections, and a progressive improvement of the Sardinian companies’ net financial positions.

Suggested Citation

  • Marco Desogus & Enrico Sergi & Stefano Zedda, 2024. "The Role of Credit Consortia in the Financial Structure of Sardinian Companies During the SARS-CoV-2 Crisis," Risks, MDPI, vol. 12(12), pages 1-29, November.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:12:p:190-:d:1532412
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/12/12/190/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-9091/12/12/190/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marco Desogus & Beatrice Venturi, 2023. "Stability and Bifurcations in Banks and Small Enterprises—A Three-Dimensional Continuous-Time Dynamical System," JRFM, MDPI, vol. 16(3), pages 1-20, March.
    2. Viral V Acharya & Sascha Steffen, 2020. "The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 430-471.
    Full references (including those not matched with items on IDEAS)

    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. Djimoudjiel, Djekonbe & T. Rostand, Dany Dombu & MBATINA NODJI, NDILENGAR, 2024. "What lessons does the COVID-19 pandemic teach us about banking liquidity and information share in the CEMAC zone?," MPRA Paper 119666, University Library of Munich, Germany, revised 17 Jan 2024.
    2. Marsh, W. Blake & Sharma, Padma, 2024. "Loan guarantees in a crisis: An antidote to a credit crunch?," Journal of Financial Stability, Elsevier, vol. 72(C).
    3. Kevin F. Kiernan & Vladimir Yankov & Filip Zikes, 2021. "Liquidity Provision and Co-insurance in Bank Syndicates," Finance and Economics Discussion Series 2021-060, Board of Governors of the Federal Reserve System (U.S.).
    4. Imen Khanchel & Naima Lassoued & Rym Gargoury, 2023. "CSR and firm value: is CSR valuable during the COVID 19 crisis in the French market?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(2), pages 575-601, June.
    5. Athira, A. & Ramesh, Vishnu K., 2023. "COVID-19 and corporate tax avoidance: International evidence," International Business Review, Elsevier, vol. 32(4).
    6. Ducret, Romain, 2021. "Investors' perception of business group membership during an economic crisis : Evidence from the COVID-19 pandemic," FSES Working Papers 524, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    7. Guo, Wen-Chung & Tseng, Ping-Lun, 2023. "COVID-19, bank risk, and capital regulation: The aggregate shock and social distancing," The Quarterly Review of Economics and Finance, Elsevier, vol. 92(C), pages 155-173.
    8. Andrieș, Alin Marius & Ongena, Steven & Sprincean, Nicu, 2021. "The COVID-19 Pandemic and Sovereign Bond Risk," The North American Journal of Economics and Finance, Elsevier, vol. 58(C).
    9. Piotr Lasak, 2021. "The Commercial Banking Sector in Eurozone after the Pandemic: The Paths to Recovery," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1233-1246.
    10. Matthew Spiegel & Heather Tookes, 2021. "Business Restrictions and COVID-19 Fatalities [The immediate effect of COVID-19 policies on social distancing behavior in the United States]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5266-5308.
    11. Bitar, Mohammad & Tarazi, Amine, 2022. "A note on regulatory responses to COVID-19 pandemic: Balancing banks’ solvency and contribution to recovery," Journal of Financial Stability, Elsevier, vol. 60(C).
    12. repec:fip:a00001:89433 is not listed on IDEAS
    13. Elisa Di Febo & Eliana Angelini & Tu Le, 2024. "European Non-Performing Exposures (NPEs) and Climate-Related Risks: Country Dimensions," Risks, MDPI, vol. 12(8), pages 1-15, August.
    14. Takahashi, Hidenori & Yamada, Kazuo, 2021. "When the Japanese stock market meets COVID-19: Impact of ownership, China and US exposure, and ESG channels," International Review of Financial Analysis, Elsevier, vol. 74(C).
    15. Brendan Laliberte & W. Blake Marsh, 2023. "The Implications of Unrealized Losses for Banks," Economic Review, Federal Reserve Bank of Kansas City, vol. 0(no. 2), pages 1-20, April.
    16. Honda, Tomohito & Uesugi, Iichiro, 2021. "COVID-19 and Precautionary Corporate Cash Holdings: Evidence from Japan," RCESR Discussion Paper Series DP21-2, Research Center for Economic and Social Risks, Institute of Economic Research, Hitotsubashi University.
    17. Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.
    18. W. Blake Marsh & Padma Sharma, 2021. "Government Loan Guarantees during a Crisis: The Effect of the PPP on Bank Lending and Profitability," Research Working Paper RWP 21-03, Federal Reserve Bank of Kansas City.
    19. Schularick, Moritz & Steffen, Sascha & Tröger, Tobias, 2020. "Bank capital and the European recovery from the COVID-19 crisis," SAFE White Paper Series 69, Leibniz Institute for Financial Research SAFE.
    20. Aydin, Deniz & Kim, Olivia S., 2024. "Precautionary Debt Capacity," EconStor Preprints 281672, ZBW - Leibniz Information Centre for Economics.
    21. Péter Harasztosi & Laurent Maurin & Rozália Pál & Debora Revoltella & Wouter van der Wielen, 2022. "Firm-level policy support during the crisis: So far, so good?," International Economics, CEPII research center, issue 171, pages 30-48.

    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:gam:jrisks:v:12:y:2024:i:12:p:190-:d:1532412. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.