The Effects of Business Credit Support Programs: Evidence from a Regression Discontinuity Design

Balila Acurio and Alessandro Tomarchio
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Balila Acurio: Banco Central de Reserva del Perú
Alessandro Tomarchio: Banco Central de Reserva del Perú

No 2025-001, Working Papers from Banco Central de Reserva del Perú

Abstract: Government-backed business loan programs have commonly been used as a policy tool for mitigating the impact of adverse scenarios such as the recent pandemic. However, the effects of these policies on micro, small and medium enterprises remain unclear, particularly in developing countries. Using firm-level data and a Fuzzy Regression Discontinuity Design, we study the impact of a large credit support program deployed in Peru in 2020 (Reactiva Peru). We examine real outcomes such as employment, sales, and survival rates. We find a positive and significant effect of Reactiva loans on the number of employees; this effect continues to linger three years after the pandemic.

Keywords: government-backed loans; regression discontinuity; small and medium-sized enterprises; developing country; business loans; crisis (search for similar items in EconPapers)
JEL-codes: E26 G20 H32 H81 (search for similar items in EconPapers)
Date: 2025-06
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