Bank Loans for Small Businesses in Times of COVID-19: Evidence from China

Quanyun Song, Jun Du and Yu Wu

Emerging Markets Finance and Trade, 2021, vol. 57, issue 6, 1652-1661

Abstract: Using representative loan-level data in China, this paper shows that bank loans for small businesses are more generous and flexible during the pandemic. In places more severely affected by the pandemic, loans for small businesses have lower costs, shorter maturities, larger amounts, are more likely to be unsecured loans. Small businesses are also more likely to extend the loan repayment, while the probability of defaulting shows no significant differences. Although the easy monetary policies implemented by central banks help small business financing, the government should pay attention to the potential NPL concerns in the post-pandemic periods.

Date: 2021
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DOI: 10.1080/1540496X.2021.1900820

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