The impact of covid-19 pandemic on credit financing of microenterprises and farmer business activity in Poland
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Department of Finance, Institute of Economics and Finance, Cardinal Stefan Wyszyński University in Warsaw, Wóycickiego 1/3, 01-938 Warszawa, Poland
Department of Economics and Economic Policy, Institute of Economics and Finance, Warsaw University of Life Sciences-SGGW, Nowoursynowska 166, 02-787 Warsaw, Poland
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
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.

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.

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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