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An Assessment of Bank Lending to UK SMEs in the wake of the crisis

Author

Listed:
  • Angus Armstrong
  • E. Philip Davis
  • Iana Liadze
  • Cinzia Rienzo

Abstract

The availability of bank finance to small and medium sized enterprises (SMEs) is important to allow SMEs to start up and finance investment for growth. To assess changes in such availability over 2001–12, we used data from a series of surveys that provide detailed information on the characteristics of a sample of UK SMEs, their owners and experiences of obtaining finance. Using econometric models, which included controls for SME characteristics and risk factors, indicators of changes in the provision of bank lending over the time period abstracting from borrower risk could be obtained. The results suggest ongoing restrictions on the availability of SME bank finance up to 2012 – which appear to have persisted into 2013. Further research using macro data shows an impact of economic uncertainty on such finance. If unresolved, these patterns could imply adverse effects on economic performance in the short and long term.

Suggested Citation

  • Angus Armstrong & E. Philip Davis & Iana Liadze & Cinzia Rienzo, 2013. "An Assessment of Bank Lending to UK SMEs in the wake of the crisis," National Institute Economic Review, National Institute of Economic and Social Research, vol. 225(1), pages 39-51, August.
    • Handle: RePEc:sae:niesru:v:225:y:2013:i:1:p:r39-r51
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    Cited by:

    1. Giebel, Marek & Kraft, Kornelius, 2018. "Bank credit supply and firm innovation," ZEW Discussion Papers 18-011, ZEW - Leibniz Centre for European Economic Research.
    2. Degryse, Hans & Matthews, Kent & Zhao, Tianshu, 2018. "SMEs and access to bank credit: Evidence on the regional propagation of the financial crisis in the UK," Journal of Financial Stability, Elsevier, vol. 38(C), pages 53-70.
    3. Jinjarak, Yothin & Wignaraja, Ganeshan, 2016. "An Empirical Assessment of the Export—Financial Constraint Relationship: How Different are Small and Medium Enterprises?," World Development, Elsevier, vol. 79(C), pages 152-163.
    4. Eggers, Fabian, 2020. "Masters of disasters? Challenges and opportunities for SMEs in times of crisis," Journal of Business Research, Elsevier, vol. 116(C), pages 199-208.

    More about this item

    Keywords

    small and medium enterprises; bank lending; credit supply; banking crisis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G01 - Financial Economics - - General - - - Financial Crises

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