IDEAS home Printed from https://ideas.repec.org/p/cbi/fsnote/2-fs-20.html
   My bibliography  Save this paper

SME liquidity needs during the COVID-19 shock

Author

Listed:
  • McGeever, Niall

    (Central Bank of Ireland)

  • McQuinn, John

    (Central Bank of Ireland)

  • Myers, Samantha

    (Central Bank of Ireland)

Abstract

The recently enacted policies to contain the spread of COVID-19 have placed a temporary block between the consumption demands of households and the supply capacity of firms in many sectors. In the context of this shock, a number of firms are likely to need some form of external liquidity support if they are to re-open once these policies are eventually relaxed. We use a combination of sector- and bank-level data to estimate Small and Medium Enterprises (SME) liquidity needs over a three month period, under a range of scenarios. We estimate that non-agricultural SMEs in Ireland will need between €2.4bn and €5.7bn if their revenues are curtailed for three months. The banking system is one potential source of liquidity provision for these firms. We look at the degree to which banks are likely to have the incentives and capacity to provide this financing. In addition, we outline the possible intervention options available to policymakers to support short-term SME liquidity needs, should private sector liquidity provision prove insufficient. All intervention options involve delicate trade-offs, which must be carefully assessed.

Suggested Citation

  • McGeever, Niall & McQuinn, John & Myers, Samantha, 2020. "SME liquidity needs during the COVID-19 shock," Financial Stability Notes 2/FS/20, Central Bank of Ireland.
    • Handle: RePEc:cbi:fsnote:2/fs/20
    as

    Download full text from publisher

    File URL: https://www.centralbank.ie/docs/default-source/publications/financial-stability-notes/no-2-sme-liquidity-needs-during-the-covid-19-shock-(mcgeever-mcquinn-and-myers).pdf?sfvrsn=6
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Ganlin Pu & Md. Qamruzzaman & Ahmed Muneeb Mehta & Farah Naz Naqvi & Salma Karim, 2021. "Innovative Finance, Technological Adaptation and SMEs Sustainability: The Mediating Role of Government Support during COVID-19 Pandemic," Sustainability, MDPI, vol. 13(16), pages 1-27, August.
    2. Muduli, Silu, 2022. "Impact of COVID-19 Packages on MSME Financing in India," EconStor Preprints 250164, ZBW - Leibniz Information Centre for Economics.
    3. 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.
    4. Ambika Zutshi & John Mendy & Gagan Deep Sharma & Asha Thomas & Tapan Sarker, 2021. "From Challenges to Creativity: Enhancing SMEs’ Resilience in the Context of COVID-19," Sustainability, MDPI, vol. 13(12), pages 1-16, June.

    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/20. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.