LOAN DEMAND DURING THE COVID-19 PANDEMIC

Zana Beqiri Luma ()
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Zana Beqiri Luma: Mother Teresa University, Skopje, North Macedonia

Journal of Developmental Entrepreneurship (JDE), 2023, vol. 28, issue 02, 1-30

Abstract: We analyze the effect of the COVID-19 outbreak on the demand for new loans across a nationally representative sample of over 10,000 firms in 45 countries. Loan demand decreases in response to the COVID-19 outbreak; however, this effect is heterogeneous across firms and countries. Small firms increase the demand for new loans whereas firms in economically more developed countries with better institutions make less loan applications following the start of the pandemic. Small firms face higher rejection rates resulting in less reliance on bank loans as a source of financing cash flow shortages. The implications of these findings together with future research directions are discussed.

Keywords: COVID-19 crisis; loan demand; SMEs; discouraged borrowers; sources of finance (search for similar items in EconPapers)
JEL-codes: D02 D22 G01 G18 G21 G32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:jdexxx:v:28:y:2023:i:02:n:s1084946723500127

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DOI: 10.1142/S1084946723500127

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