SMEs’ Access to Finance in the Euro Area: What Helps or Hampers?
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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.
Series:
Working Paper No. 2014/078
Subject:
Bank credit Banking Credit Credit default swap Financial crises Financial institutions Financial statements Loans Money Public financial management (PFM)
English
Publication Date:
May 9, 2014
ISBN/ISSN:
9781484379059/1018-5941
Stock No:
WPIEA2014078
Pages:
30
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