Credit rationing for Portuguese SMEs

Luísa Farinha; Sónia Félix

doi:10.1016/j.frl.2015.05.001

Credit rationing for Portuguese SMEs

Luísa Farinha, Sónia Félix

NOVA School of Business and Economics (NOVA SBE)

Research output: Contribution to journal › Article › peer-review

18 Citations (Scopus)

Abstract

This study examines the importance of credit demand and credit supply-related factors in explaining the evolution of credit granted to Portuguese SMEs. The results suggest that the interest rate is a strong driver of SMEs' demand for bank loans, as well as their internal financing capacity. On the other hand, credit supply mostly depends on the firms' ability to generate cash-flows and reimburse their debt, and on the amount of collateral. The model was estimated for the period between 2010 and 2012. The results suggest that a considerable fraction of Portuguese SMEs were affected by credit rationing in this period.

Original language	English
Pages (from-to)	167-177
Number of pages	11
Journal	Finance Research Letters
Volume	14
DOIs	https://doi.org/10.1016/j.frl.2015.05.001
Publication status	Published - 1 Aug 2015

Keywords

Bank loans
Credit rationing
Disequilibrium model
Financial crisis
SMEs

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10.1016/j.frl.2015.05.001

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keywords = "Bank loans, Credit rationing, Disequilibrium model, Financial crisis, SMEs",

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AU - Félix, Sónia

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AB - This study examines the importance of credit demand and credit supply-related factors in explaining the evolution of credit granted to Portuguese SMEs. The results suggest that the interest rate is a strong driver of SMEs' demand for bank loans, as well as their internal financing capacity. On the other hand, credit supply mostly depends on the firms' ability to generate cash-flows and reimburse their debt, and on the amount of collateral. The model was estimated for the period between 2010 and 2012. The results suggest that a considerable fraction of Portuguese SMEs were affected by credit rationing in this period.

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KW - Credit rationing

KW - Disequilibrium model

KW - Financial crisis

KW - SMEs

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JO - Finance Research Letters

JF - Finance Research Letters

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Credit rationing for Portuguese SMEs

Abstract

Keywords

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