Afonso Eça, Miguel Ferreira, Melissa Prado, Emanuele Rizzo, 09 December 2021

The rapid growth of FinTech platforms creates challenges and opportunities for financial markets. This column uses a new dataset from a Portuguese FinTech platform to study the determinants of lending demand and the consequences of FinTech loans for small and medium-sized enterprises. It finds that FinTech lending caters mainly to larger SMEs, with higher profitability and a lower credit risk. Additionally, it shows that firms increase assets, employment, and sales following an approved FinTech loan. Finally, FinTech lending allows firms to diversify their pool of lenders and reduce exposure to shocks in the banking system. 

Anne Epaulard, Etienne Fize, Titouan Le Calvé, Philippe Martin, Hélène Paris, Kevin Parra Ramirez, David Sraer, 02 November 2021

Governments around the world announced fiscal support measures to keep businesses afloat in response to the Covid-19 shock. This column uses bank account data from 100,000 French firms to examine the solvency and liquidity of companies across sectors. Firms in the accommodation and food services sector are doing surprising well, while many firms in the construction sector are struggling financially. The findings suggests fiscal support may not have worked as intended, and that policymakers should continue to monitor bankruptcies closely in the coming months.

Andrés Rodríguez-Pose, Roberto Ganau, Kristina Maslauskaite, Monica Brezzi, 15 December 2020

Does institutional quality mitigate the negative returns of credit rationing on labour productivity? Using data on a large sample of manufacturing firms in 11 European countries, this column demonstrates that this is indeed the case, especially for micro, small, and medium-sized firms. The negative effects of credit constraints on productivity are mitigated in those areas of Europe with high-quality governance. ‘Good’ regional institutions not only drive firm-level productivity but also, and in a more indirect way, reduce the negative productivity returns of credit constraints.

Florencio Lopez de Silanes, Joseph McCahery, Dirk Schoenmaker, Dragana Stanišić, 21 August 2015

While small and medium-sized enterprises are important for economic growth and employment, we have little insight in their financing needs. Using a novel methodology, this column presents new research that estimates the gap between demand and supply of financing in several European countries. We find that the financing gap is three to five times larger than that of US SMEs. Initiatives under the Capital Markets Union umbrella can help to reduce this financing gap.

Ganeshan Wignaraja, 12 June 2012

Small- and medium-sized enterprises are a crucial part of trade-led growth in Asia. This column argues that tackling key constraints at firm and country level would help unlock the full potential of these companies as players in economic growth.

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