SMEs’ Access to Finance in the Euro Area: What Helps or Hampers?

May 9, 2014

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Format: Chicago

Bahar Öztürk, and Mico Mrkaic. SMEs’ Access to Finance in the Euro Area: What Helps or Hampers?, (USA: International Monetary Fund, 2014) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The monetary transmission mechanism in the euro area has been adversely affected by the recent crises. Using survey data on thousands of euro area firms, we study factors that affect the access to finance of SMEs. We find that changes in bank funding costs and borrower leverage matter for firms’ access to finance. Increases in bank funding costs and borrowers’ debt-to-asset ratios are significantly and negatively associated with firms’ access to finance. The use of subsidies significantly improve access to finance of SMEs. Finally, access to finance is found to be positively related to firm size and firm age.

Subject: Bank credit, Banking, Credit, Credit default swap, Financial crises, Financial institutions, Financial statements, Loans, Money, Public financial management (PFM)

Keywords: Access to finance, Bank credit, Credit, Credit constraint, Credit default swap, Financial statements, Firm, Firm age, Firm size, Firms' access, Loans, Micro, Micro firm, Monetary policy, Small and medium sized enterprises, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/078
Stock No:

WPIEA2014078
ISBN:

9781484379059
ISSN:

1018-5941

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