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

Published online by Cambridge University Press:  26 March 2020

Angus Armstrong ,
E. Philip Davis ,
Iana Liadze  and
Cinzia Rienzo
Cinzia Rienzo
Affiliation:
NIESR
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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.

Keywords

small and medium enterprisesbank lendingcredit supplybanking crisisE44G01
Type
Research Articles
Information
National Institute Economic Review , Volume 225 , August 2013 , pp. R39 - R51
Copyright
Copyright © 2013 National Institute of Economic and Social Research

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Footnotes

This paper summarises a project prepared by NIESR for the Department of Business, Innovation and Skills. We gratefully acknowledge assistance from Stuart Fraser of Warwick Business School, advice from colleagues at BIS and suggestions from participants in seminars at BIS and NIESR.

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