Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability

This paper analyzes the impact of two distinct shocks stemming from the cross-border transmission of the 2007-2009 crisis on credit availability for small firms. The paper uses data from AccessBank Azerbaijan which was affected in its liquidity pos...

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Main Authors: Berg, Gunhild, Kirschenmann, Karolin
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
SME
Online Access:http://documents.worldbank.org/curated/en/2012/04/16212275/funding-vs-real-economy-shock-impact-2007-2009-crisis-small-firms -credit-availability
http://hdl.handle.net/10986/6032
id okr-10986-6032
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCESS TO CREDIT
ACCESS TO EXTERNAL FINANCE
ACCOUNTING
AGRICULTURAL SECTOR
APPROVAL RATE
AVAILABILITY OF CREDIT
BALANCE SHEET
BANK BRANCH
BANK CREDIT
BANK LENDING
BANK LIQUIDITY
BANKING ASSETS
BANKING SECTOR
BANKING SERVICES
BANKS
BOND
BOND ISSUE
BORROWER
BORROWING
BRANCHES
BUSINESS ACTIVITY
BUSINESS BORROWERS
BUSINESS FINANCES
BUSINESS LENDING
BUSINESS LOAN
BUSINESS LOAN APPLICATIONS
BUSINESS LOANS
CAPITAL LOANS
CAPITAL MARKETS
CENTRAL BANK
CHANNELS OF CREDIT
COLLATERAL
COMMODITY PRICE
COMPETITIVE MARKETS
CONSUMER FINANCE
CORRUPTION
CREDIT ACCESS
CREDIT APPROVAL
CREDIT AVAILABILITY
CREDIT CONSTRAINTS
CREDIT CRUNCH
CREDIT PORTFOLIO
CREDIT PORTFOLIOS
CREDIT QUALITY
CREDIT RATIONING
CREDIT RISK
CROSS-BORDER BANKING
CURRENCY DEVALUATION
CURRENCY MISMATCHES
DEBT
DEBT SERVICING
DEFAULT RATES
DEPENDENT
DEPOSIT
DISBURSEMENT
DIVERSIFICATION
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC CONDITIONS
ECONOMIC CRISIS
ECONOMIC GROWTH
ECONOMIC POLICY
ECONOMIC SITUATION
EMERGING MARKET
EMERGING MARKET ECONOMIES
EMERGING MARKETS
ENTERPRISE DEVELOPMENT
EXPANSION
EXTERNAL SHOCKS
FAMILIES
FARMERS
FEDERAL RESERVE
FEDERAL RESERVE BANK
FEMALE BORROWERS
FINANCIAL ANALYSIS
FINANCIAL CONSTRAINTS
FINANCIAL CONTAGION
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL DISTRESS
FINANCIAL INSTITUTIONS
FINANCIAL INTEGRATION
FINANCIAL INTERMEDIATION
FINANCIAL LIBERALIZATION
FINANCIAL LITERACY
FINANCIAL MARKETS
FINANCIAL PERFORMANCE
FINANCIAL SERVICES
FINANCIAL SITUATION
FINANCIAL SYSTEMS
FIRM PERFORMANCE
FIRM SIZE
FIRST LOAN
FIXED ASSETS
FOREIGN BANK
FOREIGN BANK ENTRY
FOREIGN CURRENCY
FOREIGN CURRENCY RISK
FORMAL FINANCE
GENDER
GOOD BANK
HARD CURRENCY
HOLDING
HOUSEHOLDS
HOUSING
HOUSING PRICES
INCOME STREAMS
INDIVIDUAL ENTREPRENEURS
INDIVIDUAL LOAN
INFORMATION SYSTEM
INFORMATIONAL ASYMMETRIES
INTEREST RATE
INTERNATIONAL BANK
INTERNATIONAL BANK LENDING
INTERNATIONAL CAPITAL
INTERNATIONAL CAPITAL MARKETS
INTERNATIONAL DIVERSIFICATION
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCIAL INSTITUTIONS
INTERNATIONAL MARKETS
LARGE FIRMS
LENDER
LEVELS OF CREDIT
LEVELS OF DEBT
LINES OF CREDIT
LIQUIDITY
LIQUIDITY POSITION
LIQUIDITY PROBLEMS
LIQUIDITY SUPPORT
LOAN
LOAN AMOUNT
LOAN AMOUNTS
LOAN APPLICATION
LOAN APPLICATIONS
LOAN APPROVAL
LOAN APPROVAL RATES
LOAN CATEGORY
LOAN CHARACTERISTICS
LOAN CLIENTS
LOAN CONTRACT
LOAN DEMAND
LOAN MARKET
LOAN OFFICER
LOAN OFFICERS
LOAN PORTFOLIO
LOAN PRODUCT
LOAN REQUEST
LOAN REQUESTS
LOAN SIZES
LOAN TERMS
LOAN VOLUMES
LOCAL BANK
LOCAL CURRENCY
LOCAL MARKET
LOCAL MARKETS
MARKET ECONOMIES
MARKET SHARE
MARKETING STRATEGY
MATURITY
MEDIUM ENTERPRISES
MICRO BORROWERS
MICRO CREDIT
MICRO ENTREPRENEURS
MICRO FINANCE
MICRO LOAN
MICROENTERPRISES
MICROFINANCE
MICROFINANCE INSTITUTIONS
MICROFINANCE SECTOR
MIGRATION
MORTGAGE
MULTINATIONAL
MULTINATIONAL BANKS
NATURAL DISASTERS
NUMBER OF BANKS
OIL PRICES
PLEDGE COLLATERAL
POOL OF BORROWERS
PORTFOLIO QUALITY
POTENTIAL BORROWERS
PRIVATE CAPITAL
REAL ESTATE
REMEDY
REMITTANCES
REPAYMENT
REPAYMENT BEHAVIOR
RETURN
RETURN ON EQUITY
RISK FACTORS
RISK SHARING
RISKY BORROWERS
RURAL FINANCIAL INSTITUTIONS
SAVINGS
SAVINGS BANKS
SAVINGS PRODUCTS
SHAREHOLDERS
SMALL BUSINESS
SMALL BUSINESSES
SMALL ENTERPRISES
SMALL FIRMS
SME
SME CLIENTS
SME FINANCE
SME LENDING
SUPPLIERS
SUPPLY OF FINANCE
TRADE SECTOR
TRANSITION ECONOMIES
TRANSPARENCY
TRANSPORT
URBAN AREAS
VALUE OF COLLATERAL
WORKING CAPITAL
spellingShingle ACCESS TO CREDIT
ACCESS TO EXTERNAL FINANCE
ACCOUNTING
AGRICULTURAL SECTOR
APPROVAL RATE
AVAILABILITY OF CREDIT
BALANCE SHEET
BANK BRANCH
BANK CREDIT
BANK LENDING
BANK LIQUIDITY
BANKING ASSETS
BANKING SECTOR
BANKING SERVICES
BANKS
BOND
BOND ISSUE
BORROWER
BORROWING
BRANCHES
BUSINESS ACTIVITY
BUSINESS BORROWERS
BUSINESS FINANCES
BUSINESS LENDING
BUSINESS LOAN
BUSINESS LOAN APPLICATIONS
BUSINESS LOANS
CAPITAL LOANS
CAPITAL MARKETS
CENTRAL BANK
CHANNELS OF CREDIT
COLLATERAL
COMMODITY PRICE
COMPETITIVE MARKETS
CONSUMER FINANCE
CORRUPTION
CREDIT ACCESS
CREDIT APPROVAL
CREDIT AVAILABILITY
CREDIT CONSTRAINTS
CREDIT CRUNCH
CREDIT PORTFOLIO
CREDIT PORTFOLIOS
CREDIT QUALITY
CREDIT RATIONING
CREDIT RISK
CROSS-BORDER BANKING
CURRENCY DEVALUATION
CURRENCY MISMATCHES
DEBT
DEBT SERVICING
DEFAULT RATES
DEPENDENT
DEPOSIT
DISBURSEMENT
DIVERSIFICATION
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC CONDITIONS
ECONOMIC CRISIS
ECONOMIC GROWTH
ECONOMIC POLICY
ECONOMIC SITUATION
EMERGING MARKET
EMERGING MARKET ECONOMIES
EMERGING MARKETS
ENTERPRISE DEVELOPMENT
EXPANSION
EXTERNAL SHOCKS
FAMILIES
FARMERS
FEDERAL RESERVE
FEDERAL RESERVE BANK
FEMALE BORROWERS
FINANCIAL ANALYSIS
FINANCIAL CONSTRAINTS
FINANCIAL CONTAGION
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL DISTRESS
FINANCIAL INSTITUTIONS
FINANCIAL INTEGRATION
FINANCIAL INTERMEDIATION
FINANCIAL LIBERALIZATION
FINANCIAL LITERACY
FINANCIAL MARKETS
FINANCIAL PERFORMANCE
FINANCIAL SERVICES
FINANCIAL SITUATION
FINANCIAL SYSTEMS
FIRM PERFORMANCE
FIRM SIZE
FIRST LOAN
FIXED ASSETS
FOREIGN BANK
FOREIGN BANK ENTRY
FOREIGN CURRENCY
FOREIGN CURRENCY RISK
FORMAL FINANCE
GENDER
GOOD BANK
HARD CURRENCY
HOLDING
HOUSEHOLDS
HOUSING
HOUSING PRICES
INCOME STREAMS
INDIVIDUAL ENTREPRENEURS
INDIVIDUAL LOAN
INFORMATION SYSTEM
INFORMATIONAL ASYMMETRIES
INTEREST RATE
INTERNATIONAL BANK
INTERNATIONAL BANK LENDING
INTERNATIONAL CAPITAL
INTERNATIONAL CAPITAL MARKETS
INTERNATIONAL DIVERSIFICATION
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCIAL INSTITUTIONS
INTERNATIONAL MARKETS
LARGE FIRMS
LENDER
LEVELS OF CREDIT
LEVELS OF DEBT
LINES OF CREDIT
LIQUIDITY
LIQUIDITY POSITION
LIQUIDITY PROBLEMS
LIQUIDITY SUPPORT
LOAN
LOAN AMOUNT
LOAN AMOUNTS
LOAN APPLICATION
LOAN APPLICATIONS
LOAN APPROVAL
LOAN APPROVAL RATES
LOAN CATEGORY
LOAN CHARACTERISTICS
LOAN CLIENTS
LOAN CONTRACT
LOAN DEMAND
LOAN MARKET
LOAN OFFICER
LOAN OFFICERS
LOAN PORTFOLIO
LOAN PRODUCT
LOAN REQUEST
LOAN REQUESTS
LOAN SIZES
LOAN TERMS
LOAN VOLUMES
LOCAL BANK
LOCAL CURRENCY
LOCAL MARKET
LOCAL MARKETS
MARKET ECONOMIES
MARKET SHARE
MARKETING STRATEGY
MATURITY
MEDIUM ENTERPRISES
MICRO BORROWERS
MICRO CREDIT
MICRO ENTREPRENEURS
MICRO FINANCE
MICRO LOAN
MICROENTERPRISES
MICROFINANCE
MICROFINANCE INSTITUTIONS
MICROFINANCE SECTOR
MIGRATION
MORTGAGE
MULTINATIONAL
MULTINATIONAL BANKS
NATURAL DISASTERS
NUMBER OF BANKS
OIL PRICES
PLEDGE COLLATERAL
POOL OF BORROWERS
PORTFOLIO QUALITY
POTENTIAL BORROWERS
PRIVATE CAPITAL
REAL ESTATE
REMEDY
REMITTANCES
REPAYMENT
REPAYMENT BEHAVIOR
RETURN
RETURN ON EQUITY
RISK FACTORS
RISK SHARING
RISKY BORROWERS
RURAL FINANCIAL INSTITUTIONS
SAVINGS
SAVINGS BANKS
SAVINGS PRODUCTS
SHAREHOLDERS
SMALL BUSINESS
SMALL BUSINESSES
SMALL ENTERPRISES
SMALL FIRMS
SME
SME CLIENTS
SME FINANCE
SME LENDING
SUPPLIERS
SUPPLY OF FINANCE
TRADE SECTOR
TRANSITION ECONOMIES
TRANSPARENCY
TRANSPORT
URBAN AREAS
VALUE OF COLLATERAL
WORKING CAPITAL
Berg, Gunhild
Kirschenmann, Karolin
Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
geographic_facet Azerbaijan
relation Policy Research Working Paper ; No. 6030
description This paper analyzes the impact of two distinct shocks stemming from the cross-border transmission of the 2007-2009 crisis on credit availability for small firms. The paper uses data from AccessBank Azerbaijan which was affected in its liquidity position during the second and third quarters of 2008 by delays in its refinancing. The Azeri real economy was hit by the global crisis from the fourth quarter of 2008 onwards with a combined decline in oil prices, exports, remittances, and domestic demand. Therefore, a pure supply side shock con be contrasted with a real economy shock that hit exactly when the bank's funding position strengthened again. The paper finds that during the funding shock (potential) borrowers are discouraged from applying for loans. However, for those applications made, the likelihood of loan approval is not affected. The real economy shock, in contrast, reduces the approval likelihood for SME loans in particular, while agro and micro loans are considerably less affected. Finally, bank relationships increase credit availability in good as well as in bad times.
format Publications & Research :: Policy Research Working Paper
author Berg, Gunhild
Kirschenmann, Karolin
author_facet Berg, Gunhild
Kirschenmann, Karolin
author_sort Berg, Gunhild
title Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
title_short Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
title_full Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
title_fullStr Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
title_full_unstemmed Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability
title_sort funding vs. real economy shock : the impact of the 2007-2009 crisis on small firms' credit availability
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2012/04/16212275/funding-vs-real-economy-shock-impact-2007-2009-crisis-small-firms -credit-availability
http://hdl.handle.net/10986/6032
_version_ 1764397172276592640
spelling okr-10986-60322021-04-23T14:02:24Z Funding vs. Real Economy Shock : The Impact of the 2007-2009 Crisis on Small Firms' Credit Availability Berg, Gunhild Kirschenmann, Karolin ACCESS TO CREDIT ACCESS TO EXTERNAL FINANCE ACCOUNTING AGRICULTURAL SECTOR APPROVAL RATE AVAILABILITY OF CREDIT BALANCE SHEET BANK BRANCH BANK CREDIT BANK LENDING BANK LIQUIDITY BANKING ASSETS BANKING SECTOR BANKING SERVICES BANKS BOND BOND ISSUE BORROWER BORROWING BRANCHES BUSINESS ACTIVITY BUSINESS BORROWERS BUSINESS FINANCES BUSINESS LENDING BUSINESS LOAN BUSINESS LOAN APPLICATIONS BUSINESS LOANS CAPITAL LOANS CAPITAL MARKETS CENTRAL BANK CHANNELS OF CREDIT COLLATERAL COMMODITY PRICE COMPETITIVE MARKETS CONSUMER FINANCE CORRUPTION CREDIT ACCESS CREDIT APPROVAL CREDIT AVAILABILITY CREDIT CONSTRAINTS CREDIT CRUNCH CREDIT PORTFOLIO CREDIT PORTFOLIOS CREDIT QUALITY CREDIT RATIONING CREDIT RISK CROSS-BORDER BANKING CURRENCY DEVALUATION CURRENCY MISMATCHES DEBT DEBT SERVICING DEFAULT RATES DEPENDENT DEPOSIT DISBURSEMENT DIVERSIFICATION DUMMY VARIABLE DUMMY VARIABLES ECONOMIC CONDITIONS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SITUATION EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS ENTERPRISE DEVELOPMENT EXPANSION EXTERNAL SHOCKS FAMILIES FARMERS FEDERAL RESERVE FEDERAL RESERVE BANK FEMALE BORROWERS FINANCIAL ANALYSIS FINANCIAL CONSTRAINTS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL LITERACY FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SERVICES FINANCIAL SITUATION FINANCIAL SYSTEMS FIRM PERFORMANCE FIRM SIZE FIRST LOAN FIXED ASSETS FOREIGN BANK FOREIGN BANK ENTRY FOREIGN CURRENCY FOREIGN CURRENCY RISK FORMAL FINANCE GENDER GOOD BANK HARD CURRENCY HOLDING HOUSEHOLDS HOUSING HOUSING PRICES INCOME STREAMS INDIVIDUAL ENTREPRENEURS INDIVIDUAL LOAN INFORMATION SYSTEM INFORMATIONAL ASYMMETRIES INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL MARKETS LARGE FIRMS LENDER LEVELS OF CREDIT LEVELS OF DEBT LINES OF CREDIT LIQUIDITY LIQUIDITY POSITION LIQUIDITY PROBLEMS LIQUIDITY SUPPORT LOAN LOAN AMOUNT LOAN AMOUNTS LOAN APPLICATION LOAN APPLICATIONS LOAN APPROVAL LOAN APPROVAL RATES LOAN CATEGORY LOAN CHARACTERISTICS LOAN CLIENTS LOAN CONTRACT LOAN DEMAND LOAN MARKET LOAN OFFICER LOAN OFFICERS LOAN PORTFOLIO LOAN PRODUCT LOAN REQUEST LOAN REQUESTS LOAN SIZES LOAN TERMS LOAN VOLUMES LOCAL BANK LOCAL CURRENCY LOCAL MARKET LOCAL MARKETS MARKET ECONOMIES MARKET SHARE MARKETING STRATEGY MATURITY MEDIUM ENTERPRISES MICRO BORROWERS MICRO CREDIT MICRO ENTREPRENEURS MICRO FINANCE MICRO LOAN MICROENTERPRISES MICROFINANCE MICROFINANCE INSTITUTIONS MICROFINANCE SECTOR MIGRATION MORTGAGE MULTINATIONAL MULTINATIONAL BANKS NATURAL DISASTERS NUMBER OF BANKS OIL PRICES PLEDGE COLLATERAL POOL OF BORROWERS PORTFOLIO QUALITY POTENTIAL BORROWERS PRIVATE CAPITAL REAL ESTATE REMEDY REMITTANCES REPAYMENT REPAYMENT BEHAVIOR RETURN RETURN ON EQUITY RISK FACTORS RISK SHARING RISKY BORROWERS RURAL FINANCIAL INSTITUTIONS SAVINGS SAVINGS BANKS SAVINGS PRODUCTS SHAREHOLDERS SMALL BUSINESS SMALL BUSINESSES SMALL ENTERPRISES SMALL FIRMS SME SME CLIENTS SME FINANCE SME LENDING SUPPLIERS SUPPLY OF FINANCE TRADE SECTOR TRANSITION ECONOMIES TRANSPARENCY TRANSPORT URBAN AREAS VALUE OF COLLATERAL WORKING CAPITAL This paper analyzes the impact of two distinct shocks stemming from the cross-border transmission of the 2007-2009 crisis on credit availability for small firms. The paper uses data from AccessBank Azerbaijan which was affected in its liquidity position during the second and third quarters of 2008 by delays in its refinancing. The Azeri real economy was hit by the global crisis from the fourth quarter of 2008 onwards with a combined decline in oil prices, exports, remittances, and domestic demand. Therefore, a pure supply side shock con be contrasted with a real economy shock that hit exactly when the bank's funding position strengthened again. The paper finds that during the funding shock (potential) borrowers are discouraged from applying for loans. However, for those applications made, the likelihood of loan approval is not affected. The real economy shock, in contrast, reduces the approval likelihood for SME loans in particular, while agro and micro loans are considerably less affected. Finally, bank relationships increase credit availability in good as well as in bad times. 2012-04-27T07:44:06Z 2012-04-27T07:44:06Z 2012-04 http://documents.worldbank.org/curated/en/2012/04/16212275/funding-vs-real-economy-shock-impact-2007-2009-crisis-small-firms -credit-availability http://hdl.handle.net/10986/6032 English Policy Research Working Paper ; No. 6030 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Azerbaijan