Credit Financing of Micro-Enterprises and Farmers by Commercial and Cooperative Banks in Poland: Does the Use of Investment and Working Capital Loans Change During the COVID-19 Pandemic?..

Michał Wielechowski; Adam Zając; Katarzyna Czech

Michał Wielechowski Szkoła Główna Gospodarstwa Wiejskiego w Warszawie
Adam Zając Institute of Economics and Finance, Cardinal Stefan Wyszyński University http://orcid.org/0000-0002-1919-3098
Katarzyna Czech Institute of Economics and Finance, Warsaw University of Life Sciences SGGW http://orcid.org/0000-0002-0660-7124

Abstrakt

Purpose – The paper aims to assess the credit financing of microenterprises and farmers by commercial and cooperative banks in pre-Covid-19 and Covid-19 subperiods.

Research method – In the study, we apply the Kruskal-Wallis test and Wilcoxon ranksum pairwise comparison test with the adjustment based on the Benjamini and Hochberg method to check whether there are significant differences in mean values of banking loan categories for microenterprises and farmers among commercial and cooperative banks in the pre-Covid-19 and Covid-19 periods.

Results – We observe that microenterprises mostly use commercial banks, while farmers depend majorly on cooperative banks. Additionally, farmers use investment loans more often than microenterprises. We show a significant decline in loan sales and enquiries among microenterprises and farmers during Covid-19. Moreover, we observe the median values of all analysed categories show significant differences between commercial and
cooperative banks. It concerns both investment and working capital loans.

Originality / value / implications / recommendations – Our contribution is that we analyse this issue from the perspective of leading suppliers offering banking loans, i.e., commercial and cooperative banks. We detect whether analysed banking loan categories differ significantly in the group of microenterprises and farmers across commercial and cooperative banks in Poland in the above-mentioned periods. To our knowledge, there are no similar studies. The results of our study might be helpful for banking institutions and policymakers
in the context of a potential future pandemic or crisis situation.

Bibliografia

Ayyagari M., Beck T., Demirguc-Kunt A., 2007, Small and Medium Enterprises Across the Globe, “Small Business Economics”, 29(4), pp. 415-434, DOI: 10.1007/s11187-006-9002-5.
Beck R., Jakubik P., Piloiu, A., 2015, Key Determinants of Non-performing Loans: New Evidence from a Global Sample, “Open Economies Review”, 26(3), pp. 525-550, DOI: 10.1007/s11079-015-9358-8.
Bigsten A., 2003, Credit Constraints in Manufacturing Enterprises in Africa, “Journal of African Economics”, 12(1), pp. 104-125, DOI: 10.1093/jae/12.1.104.
Cowling M., Liu W., Ledger A., 2012, Small business financing in the UK before and during the current financial crisis, “International Small Business Journal: Researching Entrepreneurship”, 30(7), pp. 778-800, DOI: 10.1177/0266242611435516.
Czech K., Karpio A., Wielechowski M., Woźniakowski T., Żebrowska-Suchodolska D., 2020, Polska gospodarka w początkowym okresie pandemii COVID-19, Wydawnictwo SGGW.
Domańska-Szaruga B., Mazurek K., 2021, Sources of enterprises’ financing from the SME sector in the Mazowieckie Voivodeship, “Nowoczesne Systemy Zarządzania”, 16(2), pp. 81-91, DOI: 10.37055/nsz/140417.
Dylewski M., 2016, Klasyczne podejście do finansowania działalności sektora MŚP [in:] Finanse małych i średnich firm. Innowacje, decyzje, procesy, Dylewski M. (ed.), CeDeWu, Warszawa, pp. 27-29.
Entrepreneurs Law, 2018, Act of 6 March 2018 on entrepreneurs - Entrepreneurs Act (Text No 646), POL-2018-L-107935.
European Commission Regulation, 2014, Commission regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, Official Journal of the European Union, L 187/1.
Fabeil N.F., Pazim K.H., Langgat J., 2020, The Impact of COVID-19 Pandemic Crisis on Micro-Enterprises: Entrepreneurs’ Perspective on Business Continuity and Recovery Strategy, SSRN Scholarly Paper ID 3612830, https://papers.ssrn.com/abstract=3612830.
Fiordelisi F., Mare D.S., 2014, Competition and financial stability in European cooperative banks, “Journal of International Money and Finance”, 45, pp. 1-16. DOI: 10.1016/j.jimonfin.2014.02.008.
Hale T., Angrist N., Cameron-Blake E., Hallas L., Kira B., Mjumdar S., Petherick A., Phillips T., Tatlow H., Webster S., 2020, Variation in government responses to COVID-19. Blavatnik School of Government Working Paper Series, BSG-WP-2020/032(Version 8.0), pp. 1-29.
Hartšenko J., Sauga A., 2013, The role of financial support in SME and economic development in Estonia. Business and Economic Horizons, 9(2), pp. 10-22, DOI: 10.15208/beh.2013.6.
Heropolitańska I., Nierodka A., Zdziarski, T., 2020, Kredyty, pożyczki i gwarancje bankowe, Wolters Kluwer.
Idasz-Balina M., Balina R., Achsani N.A., Błaszczak I., Chrostowska-Juszczyk G., 2020, The Determinants of Cooperative Banks’ Community Service - Empirical Study from Poland, “Sustainability”, 12(5), 1885, pp. 1-12, DOI: 10.3390/su12051885.
Janc A., 2004, Modern banking in transition economies of Central and Eastern Europe. Poznań University of Economics.
Kata R., 2019, Economic and financial efficiency as a development challenge for cooperative banks in Poland, “Annals of the Polish Association of Agricultural and Agribusiness Economists”, Vol. XXI, No. (3), pp. 173-182, DOI: 10.5604/01.3001.0013.3536.
Kauko K., Loman T., Mäki-Fränti P., Salenius T., Vauhkonen J., 2021, Moderate growth in Finnish companies’ non-performing loans, Bank of Finland Bulletin, Bank of Finland.
Kozioł K., Pitera R., 2018, Kredyt bankowy jako podstawa zewnętrznego finansowania małych i średnich przedsiębiorstw sektora usług, “Studies of the Industrial Geography Commission of the Polish Geographical Society”, 32(2), pp. 152-163, DOI: 10.24917/20801653.322.10.
Laing T., 2020, The economic impact of the Coronavirus 2019 (Covid-2019): Implications for the mining industry, “The Extractive Industries and Society”, 7(2), pp. 580-582. DOI: 10.1016/j.exis.2020.04.003.
Lang F., Signore S., Gvetadze S., 2016, The role of cooperative banks and smaller institutions for the financing of SMEs and small midcaps in Europe, No. 2016/36, EIF Working Paper.
Manzoor F., Wei L., Sahito N., 2021, The role of SMEs in rural development: Access of SMEs to finance as a mediator, “PLOS ONE”, 16(3), e0247598, pp. 1-18, DOI: 10.1371/journal.pone.0247598.
Owsiak S., 2015, Finanse, Polskie Wydawnictwo Ekonomiczne, Warszawa.
Rizhamadze K., Ābeltina A., 2021, The Factors that Promote Business Growth Opportunities for SMEs in Latvia in Wholesale and Retail Trade Sector, [in:] Bilgin M.H., Danis H., Demir E., Karabulut G. (ed.), Eurasian Business and Economics Perspectives, Vol. 20, pp. 115-126, Springer International Publishing, DOI: 10.1007/978-3-030-85304-4_7
Secinaro S., Calandra D., Biancone P.P., 2020, Reflection on Coronavirus Accounting Impact on Small and Medium Sized Enterprises (SMEs) in Europe, “International Journal of Business and Management”, 15(7), pp. 48-56, DOI: 10.5539/ijbm.v15n7p48.
Sierpińska-Sawicz A., 2018, Scope of using credit loans by enterprises in Poland against the background of the European Union countries, “Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu”, 513, pp. 342-352, DOI: 10.15611/pn.2018.513.32.
Siudek T., 2011, Bankowość spółdzielcza w Polsce w wybranych krajach Unii Europejskiej – wymiar ekonomiczny, organizacyjny i społeczny, Warszawa: Wydawnictwo SGGW.
Statistics Poland, 2022, Activity of non-financial enterprises in 2019, Statistics Poland.
Taiwo M.A., Ayodeji A.M., Yusuf B.A., 2013, Impact of Small and Medium Enterprises on Economic Growth and Development, “American Journal of Business and Management”, 2(1), pp. 18-22, DOI: 10.11634/21679606170644.
Ustawa, 2016, Ustawa z dnia 29 sierpnia 1997 r. – Prawo bankowe ( Dz. U. 1997 Nr 140 poz. 939 z późn. zm.).
Vermoesen V., Deloof M., Laveren E., 2013, Long-term debt maturity and financing constraints of SMEs during the Global Financial Crisis, ”Small Business Economics”, 41(2), pp. 433-448, DOI: 10.1007/s11187-012-9435-y.
Zając A., Wielechowski M., Czech K., 2021, The impact of COVID-19 pandemic on credit financing of microenterprises and farmer business activity in Poland, “Journal of Modern Science”, 47(2), pp. 475-496, DOI: 10.13166/jms/143524.