Only Some Banks Have Been Able to Help SMEs During COVID
Large, rooted in the various territories of the Peninsula and with strong IT capabilities: this is the identikit of the banking institutions that have ensured effective disbursement to Small and Medium Enterprises (SMEs) of loans wholly guaranteed by the Italian government. The financing comes through the so-called Fondo di Garanzia (Guarantee Fund), up to a threshold of €25,000, subsequently raised to 30,000. This is the subject of the research study "Public Guarantees for Small Businesses in Italy during Covid-19" by Filippo De Marco (Bocconi University and CEPR) and Fabrizio Core (Erasmus University and ERIM). The study analyzed the data of the Guarantee Fund for the companies which have applied for the facilitated lending formula, considering the amount, the interest rate paid and above all the disbursement times, as well as information on the banks involved to infer their characteristics.
"It is a system that has rewarded SMEs that already had relations with an efficient bank" especially from a technological point of view, explains De Marco. "This could have created a situation of unequal access to credit". Not only that: many companies that could have requested higher amounts have preferred to go through the procedure that had the €25,000 ceiling. The reason? "Greater simplicity of the loan application process. A trend that reveals room for improvement", says De Marco. "Overall, 16% of the companies registered with Infocamere submitted an application. It is a figure on average with other EU countries. It means that in the perception of entrepreneurs this is a loan, albeit a subsidized one, rather than a government grant ". But a surprising result, according to De Marco, is that the trend of requests was affected by regional characteristics despite the March-April 2020 lockdown being national, controlling for the birth and mortality rates of firms across provinces.
In fact, looking at Italy from a geographical point of view, it emerges that more applications were submitted in the North between April and May, while, between July and August, requests were concentrated in the Center-South of the country. Overall, however, industry sector weighed more than province where the firm is located. The sector of non-essential services, shut down during the lockdown, was the one that made the largest use of guaranteed credit, together with some medical practices that remained open. In their case, in fact, many patients have postponed less urgent care for fear of contagion.
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