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Analysis of SME Segment Lending Processes in Light of Credit Guarantees in the European Union

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  • Ádám Balog

    (MKB Bank)

Abstract

Funding as a problem has ranked much lower on the list of SMEs’ most daunting challenges since 2011, according to the ECB’s SAFE survey. The accommodative monetary policy of the central banks in advanced markets coupled with the low interest rate environment has contributed to the fact that financing conditions have been considerably relaxed at global level since 2010. In the EU, 80–85 per cent of SME borrowing is realised through bank loans, thus entailing the risk that companies’ access to finance may be constrained in conditions of financial turbulence, which threatens the development of productivity. Increasing the role of credit guarantees is an important tool in mitigating the impact of these trends, and it assists financial institutions in helping the SME sector with funds in a recession with greater certainty and lower risk.

Suggested Citation

  • Ádám Balog, 2018. "Analysis of SME Segment Lending Processes in Light of Credit Guarantees in the European Union," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(1), pages 62-82.
    • Handle: RePEc:mnb:finrev:v:17:y:2018:i:1:p:62-82
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    Cited by:

    1. Wang, Kai & Ding, Peiqi & Zhao, Ruiqing, 2021. "Strategic credit sales to express retail under asymmetric default risk and stochastic market demand," Omega, Elsevier, vol. 101(C).
    2. Larysa Poliatykina & Iryna Samoshkina & Victoria Borisova, 2022. "Accounting And Financial Problems Of Bank Lending To Agro-Industrial Enterprises In Ukraine," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 8(1).

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    More about this item

    Keywords

    credit guarantee; SME; banking system;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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