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

Marco Desogus, Enrico Sergi and Stefano Zedda ()
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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

Risks, 2024, vol. 12, issue 12, 1-29

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.

Keywords: credit consortia; SARS-CoV-2 pandemic; bank–firm relationship; SMEs (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2024
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