Evaluating the Impact of COVID-19 on Credit Rationing for Tunisian SMEs: A Conditional Difference-in-Differences Analysis

The COVID-19 pandemic has had a substantial impact on the global economy, particularly small and medium-sized enterprises (SMEs). This empirical study examines the effects of the pandemic on credit rationing for SMEs in Tunisia using a panel firm-level dataset spanning from 2014 to 2020. To analyze these effects, we employ the conditional difference-indifferences (CDiD) approach, which extends the commonly used difference-in-differences evaluation method. Our findings indicate that despite government support measures for SMEs, the COVID-19 pandemic has led to increased rates of credit rationing. We further explore heterogeneity in these effects based on criteria like corporate indebtedness and investment levels, identifying the most affected categories. Our results highlight that SMEs heavily reliant on suppliers, those with significant reliance on the banking system, and low financial resilience encounter more severe credit rationing compared to other groups. Additionally, credit rationing is more pronounced in the secondary sector compared to the tertiary sector.