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The impact of covid-19 pandemic on credit financing of microenterprises and farmer business activity in Poland
 
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1
Department of Finance, Institute of Economics and Finance, Cardinal Stefan Wyszyński University in Warsaw, Wóycickiego 1/3, 01-938 Warszawa, Poland
2
Department of Economics and Economic Policy, Institute of Economics and Finance, Warsaw University of Life Sciences-SGGW, Nowoursynowska 166, 02-787 Warsaw, Poland
3
Department of Econometrics and Statistics, Institute of Economics and Finance, Warsaw University of Life Sciences-SGGW, Nowoursynowska 166, 02-787 Warsaw, Poland
Submission date: 2021-09-15
Acceptance date: 2021-11-02
Publication date: 2021-12-22
 
JoMS 2021;47(2):475–496
 
KEYWORDS
TOPICS
ABSTRACT
Objectives:
The main aim of the paper is to assess the impact of COVID-19 on the credit financing of microenterprises and farmers in Poland.

Material and methods:
We study the investment loans and working capital loans for microenterprises and farmers from the perspective of their number, value, number of loan enquiries, and the share of non-performing loans. We obtain monthly data from BIK. The research period covers the two-year period, including the pre-COVID-19 subperiod from March 2019 till February 2020 and the COVID-19 subperiod from March 2020 till February 2021. We apply the two-sample t-test to assess whether the mean values of analysed credit measures differ significantly in two analysed periods.

Results:
The study reveals a significant decrease in the number and value of the investment and working capital loans during the COVID-19 period compared to the pre-COVID-19 period. The descriptive statistics indicate that the decline was greater in the group of microenterprises than farmers. Surprisingly, despite the difficult time for entrepreneurs, the COVID-19 pandemic result in a significant reduction in the number of loans enquiries, including investment and working capital loans, in both analysed groups of entrepreneurs. The number and value of non-performing loans increase as a consequence of the COVID-19 pandemic. However, the value of non-performing investment loans in the group of microenterprises increases marginally.

Conclusions:
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.

 
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