The impact of COVID-19 pandemic on credit financing of microenterprises and farmer business activity in Poland

• Authors: Michał Wielechowski , Adam Zając , Katarzyna Czech

Abstracts

EN

Our study shows that the novel coronavirus pandemic has significantly affected the banking loan market for microenterprises and farmers. We observe a decrease in granted loans and loan enquiries and an increase in the share of non-performing loans. Our research might be useful for the Polish national government, financial institutions, banks, and entrepreneurs.

Keywords

EN

COVID-19 pandemic; microenterprises; farmers; investment loans; working capital loans; loan enquiries; non-performing loans

• Publisher: Wyższa Szkoła Gospodarki Euroregionalnej im. Alcide De Gasperi w Józefowie
• Journal: Journal of Modern Science
• Year: 2021
• Issue: 2/47/2021
• Pages: 475-496

Dates

published

2021

Contributors

author

Michał Wielechowski

• Szkoła Główna Gospodarstwa Wiejskiego w Warszawie

author

Adam Zając

• Uniwersytet Kardynała Stefana Wyszyńskiego w Warszawie

author

Katarzyna Czech

• Szkoła Główna Gospodarstwa Wiejskiego w Warszawie

References

• Act of 6 March 2018 - Entrepreneurs' Law (Article 7), Journal of Laws 2018 item 646 consolidated text.
• Aggarwal, S., Nawn, S., & Dugar, A. (2020). What caused global stock market meltdown during the COVID pandemic-Lockdown stringency or investor panic? Finance Research Letters, 101827. https://doi.org/10.1016/j.frl.2020.101827
• Andersen, K. G., Rambaut, A., Lipkin, W. I., Holmes, E. C., & Garry, R. F. (2020). eTh proximal origin of SARS-CoV-2. Nature Medicine, 26(4), 450-452. https://doi. org/10.1038/s41591-020-0820-9
• Ayyagari, M., Beck, T., & Demirguc-Kunt, A. (2007). Small and Medium Enterprises Across the Globe. Small Business Economics, 29(4), 415-434. https://doi.org/10.1007/ s11187-006-9002-5
• Barro, R., Ursúa, J., & Weng, J. (2020). eTh Coronavirus and the Great Inuflenza Pandemic: Lessons from the “Spanish Flu” for the Coronavirus's Potential Eefcts on Mortality and Economic Activity (No. w26866; p. w26866). National Bureau of Economic Research. http://www.nber.org/papers/w26866.pdf
• Basel Committee on Banking Supervision, Core Principles for Eefctive Banking Supervision, September 2012.
• Bavel, J. J. V.,Baicker, K., Boggio, P. S., Capraro, V., Cichocka, A., Cikara, M., Crockett, M. J., Crum, A. J., Douglas, K. M., Druckman, J. N., Drury, J., Dube, O., Ellemers, N., Finkel, E. J., Fowler, J. H., Gelfand, M., Han, S., Haslam, S. A., Jetten, R. (2020). Using social and behavioural science to support COVID-19 pandemic response. Nature Human Behaviour, 4(5), 460-471. https://doi.org/10.1038/s41562-020-0884-z
• Beck, R., Jakubik, P., & Piloiu, A. (2015). Key Determinants of Non-performing Loans: New Evidence from a Global Sample. Open Economies Review, 26(3), 525-550. https://doi.org/10.1007/s11079-015-9358-8
• Bernanke, B. (1983). Non-Monetary Eefcts of the Financial Crisis in the Propagation of the Great Depression (No. w1054; p. w1054). National Bureau of Economic Research. https://doi.org/10.3386/w1054
• Bigsten, A., Collier, P., Dercon, S., Fafchamps, M., Gauthier, B., Gunning, J. W., Oduro, A., Oostendorp, R., Patillo, C., Söderbom, M., Teal, F., & Zeufack, A. (2003). Credit Constraints
• BIK: https://www.bik.pl/o-nas, access: 30.06.2021.
• Commission regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 10 of the Treaty. in Manufacturing Enterprises in Africa. Journal of African Economies, 12(1), 104-125. https://doi.org/10.1093/jae/12.1.104
• Bourletidis, K., & Triantafyllopoulos, Y. (2S0M1E4)s. Survival in Time of Crisis: Strategies, Tactics and Commercial Success Stories. Procedia - Social and Behavioral Sciences, 148, 639-644. https://doi.org/10.1016/j.sbspro.2014.07.092
• Calza, A., Gartner, C., & Sousa, J. (2003). Modelling the demand for loans to the private sector in the euro area. Applied Economics, 35(1), 107-117. https://doi. org/10.1080/00036840210161837
• Cheng, C., Barceló, J., Hartnett, A. S., Kubinec, R., & Messerschmidt, L. (2020). COVID-19 Government Response Event Dataset (CoronaNet v.1.0). Nature Human Behaviour, 4(7), 756-768. https://doi.org/10.1038/s41562-020-0909-7
• Cowling, M., Liu, W., & Ledger, A. (2012). Small business financing in the UK before and during the current financial crisis. International Small Business Journal, 30(7), 778-800. https://doi.org/10.1177/0266242611435516
• Czech, K., Karpio, A., Wielechowski, M., Woźniakowski, T., & ŻebrowskaSuchodolska, D. (2020). Polska gospodarka w początkowym okresie pandemii COVID-19. WULS-SGGW.
• Czerwińska-Lubszczyk, A., & Michna, A. (201S3M).E in economic slowdown. Zeszyty Naukowe Politechniki Śląskiej, Z. 64, 21-31.
• Dias, Á. L., Manuel, E. C., Dutschke, G., Pereira, R., & Pereira, L. (2021). Economic crisis eefcts on SME dynamic capabilities. International Journal of Learning and Change, 13(1), 63. https://doi.org/10.1504/IJLC.2021.111662
• Dimitrios, A., Helen, L., & Mike, T. (2016). Determinants of non-performing loans: Evidence from Euro-area countries. Finance Research Letters, 18, 116-119. https:// doi.org/10.1016/j.frl.2016.04.008
• Erdogan, A. I. (2018)F.actors aefcting SME access to bank financing: An interview study with Turkish bankers. Small Enterprise Research, 25(1), 23-35. https://doi. org/10.1080/13215906.2018.1428911
• Ertaş, M., Sel, Z. GK.,ırlar-Can, B., & Tütüncü, Ö. (2021). Eefcts of crisis on crisis-man agement practices: A case from Turkish tourism enterprises. Journal of Sustainable Tourism, 29(9), 1490-1507. https://doi.org/10.1080/09669582.2021.1879818
• Fabeil, N. F., Pazim, K. H., & Langgat, J. (2020). eTh Impact of COVID-19 Pandemic Crisis on Micro-Enterprises: Entrepreneurs' Perspective on Business Continuity and Recovery Strategy (SSRN Scholarly Paper ID 3612830). Social Science Research Network. https://papers.ssrn.com/abstract=3612830
• Falagiarda, M., Prapiestis, A., & Rancoita, E. (2020). Public loan guarantees and bank lending in the COVID-19 period. Economic Bulletin Boxes, 6. https://ideas.repec. org/a/ecb/ecbbox/202000067.html
• Gourinchas, P.-O., Kalemli-Özcan, Sebnem, Penciakova, V., & Sander, N. (2020). COVID-19 and SME Failures (No. w27877; p. w27877). National Bureau of Economic Research. https://doi.org/10.3386/w27877
• Hale, T., Angrist, N., Cameron-Blake, E., Hallas, L., Kira, B., Mjumdar, S., Petherick, A., Phillips, T., Tatlow, H., & Webster, S. (2020). Variation in government responses to COVID-19. Blavatnik School of Government Working Paper Series, BSG-WP2020/032(Version 8.0), 1-29.
• Hale, T., Webster, S., Petherick, A., Phillips, T., & Kira, B. (2020). Oxford COVID-19 Government Response Tracker. Blavatnik School of Government. www.bsg.ox.ac. uk/covidtracker
• Hasan, I., Politsidis, P. N., & Sharma, Z. (2020). Bank Lending during the COVID-19 Pandemic. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3711021
• IHS Markit: PMITM by HIS Markit. https://ihsmarkit.com/products/pmi.html, access: 29.06.2021.
• Jumpah, E. T., Osei-Asare, Y., & Tetteh, E. K. (2019). Do farmer and credit specific characteristics matter in microfinance programmes' participation? Evidence from smallholder farmers in Ada west and east districts. Agricultural Finance Revi 79(3), 353-370. https://doi.org/10.1108/AFR-05-2018-0044
• Kauko, K., Loman, T., Mäki-Fränti, P., Salenius, T., & Vauhkonen, J. (2021). Moderate growth in Finnish companies' non-performing loans (Bank of Finland Articles on the Economy) [Bank of Finland Bulletin]. Bank of Finland.
• Ker, A. P. (2020).Risk management in Canada's agricultural sector in light of COVID‐19. Canadian Journal of Agricultural Economics/Revue Canadienne d'agroeconomie 68(2), 251-258. https://doi.org/10.1111/cjag.12232
• Kola-Bezka, M. (2011). SMEs in Poland during the world economic crisisZ. eszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia, 43, 79-89.
• Laing, T. (2020). The economic impact of the Coronavirus 2019 (Covid-2019): Implications for the mining industry. eTh Extractive Industries and Society, 7(2), 580-582. https://doi.org/10.1016/j.exis.2020.04.003
• Liu, L., Liu, Y., & Kim, J.-M. (2020). Sustainable Visual Analysis for Bank NonPerforming Loans and Government Debt Distress. Sustainability, 12(1), 131. https:// doi.org/10.3390/su12010131
• Lorenzo, M., & Lean, A. (2020)eTh. Economic Impact of COVID-19. IDOSR Journal of Banking, Economics and Social Sciences, 5(1), 45-50.
• Maier, B. F., & Brockmann, D( 2.020). Eefctive containment explains subexponential growth in recent conrfimed COVID-19 cases in China. Science, 368(6492), 742-746. https://doi.org/10.1126/science.abb4557
• Mitręga-Niestrój, K. (201e2Th)c.onsequences of the global nfiancila crisis for the real sphere-International perspective. Economic Studies, 122, 159-171.
• Nastase, C., & Kajanus, M. (2009eTh).Impact of the Global Crisis on SME and Entrepreneurship Bahavior - Romania and Finland Cases. eTh Amtfieatru Economic Journal, 11, 751-762.
• Paulet, E., Parnaudeau, M., & Abdessemed, T. (2014). eTh SME struggle for nfiancing: A clampdown in European banks post-crisis. Journal of Business Strategy, 35(2), 36-45. https://doi.org/10.1108/JBS-09-2013-0089
• Polish Financial Supervision Authority, Recommendation R on the principles of identification of balance sheet impaired credit exposures, determinati-on of: im pairment losses on balance sheet credit exposures, and provisions for of-balance sheet credit exposures, Warsaw 2011
• Snedecor, G. W., & Cochran, W. G. (1989). Statistical Methods (8th Edition). Iowa State University Press.
• Statistics Poland, Activity of Non-Financial Enterprises in 2018, statistical analysis, Warsaw 2019.
• Vasilescu, L. (2014). Accessing Finance for Innovative EU SMEs Key Drivers and Challenges. Economic Review: Journal of Economics and Business, 12(2), 35-47.
• Woźniak, P., Rogowski, W. (2012G). łówne produkty i usługi oferowane przez Biuro Informacji Kredytowej S.A. w: Kurkliński, Lech; Markowski, Krzysztof, Systemy Wymiany Informacji Kredytowej. Doświadczenia polskie i europejskie. Warszawa: Biuro Informacji Kredytowej S.A.
• Wu, D. D., & Olson, D. L. (2020). eTh Eefct of COVID-19 on the Banking Sector. In D. D. Wu & D. L. Olson (Eds.), Pandemic Risk Management in Operations and Finance: Modeling the Impact of COVID-19 (pp. 89-99). Springer International Publishing. https://doi.org/10.1007/978-3-030-52197-4_8
• Xia, X., & Gan, L. (2020).SME nfiancing with new credit guarantee contracts over the business cycle. International Review of Economics & Finance, 69, 515-538. https:// doi.org/10.1016/j.iref.2020.04.015

Identifiers

DOI

10.13166/jms/143524

Biblioteka Nauki

1969124