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Sensitivity to the crisis of SME financing in Belgium

Author

Listed:
  • Ch. Piette

    (National Bank of Belgium, Research Department)

  • M.-D. Zachary

    (National Bank of Belgium, Research Department)

Abstract
This article uses various qualitative and quantitative data sources to investigate how bank loans granted to Belgian SME s were affected in the wake of the recent economic and financial crisis.Credit demand from SMEs declined, albeit to a lesser extent than demand from larger firms, which made more use of alternative instruments owing to their easier access to financial markets. On the supply side, survey data indicate that banks perceive SME s as presenting a higher risk, so that they apply tighter credit conditions to this type of firms. Firm-level data suggest that the increase in credit risk was mostly concentrated within a relatively small fraction of Belgian SME s whose financial health deteriorated somewhat faster after the onset of the crisis. These divergent risk profiles seem to have been taken into account by Belgian banks in their credit policy. This is confirmed by an econometric analysis that links the financial situation of the SME s to their access to bank credit. It shows that Belgian banks do indeed take account of the SME s’ financial situation but did not become more risk-averse after the onset of the crisis as far as existing lender-borrower relationships are concerned. However, they tended to favour lower risk profiles when granting loans to SME s which were not part of their existing corporate clientele.

Suggested Citation

  • Ch. Piette & M.-D. Zachary, 2015. "Sensitivity to the crisis of SME financing in Belgium," Economic Review, National Bank of Belgium, issue iii, pages 31-45, December.
    • Handle: RePEc:nbb:ecrart:y:2015:m:december:i:iii:p:31-45
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    File URL: https://www.nbb.be/en/articles/sensitivity-crisis-sme-financing-belgium-0
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    References listed on IDEAS

    as
    1. D. Vivet, 2011. "Results and financial situation of firms in 2010," Economic Review, National Bank of Belgium, issue iii, pages 69-104, December.
    2. David Vivet, 2011. "Development of a financial health indicator based on companies’ annual accounts," Working Paper Document 213, National Bank of Belgium.
    3. B. De Backer & Ph. Du Caju & M. Emiris & Ch. Van Nieuwenhuyze, 2015. "Macroeconomic determinants of non-performing loans," Economic Review, National Bank of Belgium, issue iii, pages 47-65, December.
    4. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    5. Gert Wehinger, 2014. "SMEs and the credit crunch: Current financing difficulties, policy measures and a review of literature," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2013(2), pages 115-148.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Cornille, David & Rycx, François & Tojerow, Ilan, 2018. "Heterogeneous Effects of Credit Constraints on SMEs' Employment: Evidence from the Great Recession," IZA Discussion Papers 11257, Institute of Labor Economics (IZA).
    2. David Cornille & François Rycx & Ilan Tojerow, 2017. "The employment consequences of SMEs’ credit constraints in the wake of the great recession," Working Paper Research 333, National Bank of Belgium.
    3. Cornille, David & Rycx, François & Tojerow, Ilan, 2019. "Heterogeneous effects of credit constraints on SMEs’ employment: Evidence from the European sovereign debt crisis," Journal of Financial Stability, Elsevier, vol. 41(C), pages 1-13.
    4. Eggers, Fabian, 2020. "Masters of disasters? Challenges and opportunities for SMEs in times of crisis," Journal of Business Research, Elsevier, vol. 116(C), pages 199-208.

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    More about this item

    Keywords

    SME Financing; bank lending; financial risk;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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