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Bank Lending to Businesses in a Pandemic

Author

Listed:
  • Zoriana Krykhovetska
  • Svitlana Kropelnytska
  • Iryna Kokhan
  • Tetiana Myhovych
  • Veronika Dmytrovska

Abstract

The relevance of the study is that the pandemic has affected the financial stability of many businesses. The purpose of the study is to consider the features of bank lending to businesses in a pandemic. Providing credit in the era of the coronavirus is associated with increased risk. However, this does not mean that it is impossible to obtain new funding. Banks still offer a variety of credit products, including mortgages and cash or credit card loans. Changes in the level of debt mask the distinction between new borrowings and repayments of existing amounts. Business loans are mostly short-term, and their rates can be adjusted relatively easily. Historical data shows that on average, 90% of new business loans have a variable or fixed rate with a maturity of less than one year. The huge surge in loans to new businesses is primarily conditioned upon this short-term financing. The speed and scale of the return of the gap to the pandemic is unprecedented. The practical significance lies in the analysis of problems and obstacles to bank lending to businesses in a pandemic, and ways to solve them.

Suggested Citation

  • Zoriana Krykhovetska & Svitlana Kropelnytska & Iryna Kokhan & Tetiana Myhovych & Veronika Dmytrovska, 2024. "Bank Lending to Businesses in a Pandemic," Journal of Economic Issues, Taylor & Francis Journals, vol. 58(1), pages 211-220, January.
    • Handle: RePEc:mes:jeciss:v:58:y:2024:i:1:p:211-220
    DOI: 10.1080/00213624.2024.2308461
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