An Analysis of the Macroeconomic Conditions Required for SME Lending: Evidence from Turkey and Other Emerging Market Countries

Abstract

Providing small and medium enterprises (SMEs) with access to external finance has been a major concern for many governments and international organizations for three decades. In recent years the experiences of emerging market countries suggest that a paradigm shift is taking place in SME finance. Particularly in fast-growing emerging market countries such as Turkey, banks are increasingly targeting SMEs as a new line of banking business. This research analyzes how macroeconomic factors have contributed to increased commercial bank lending to SMEs in six emerging market countries: Turkey, Argentina, Brazil, Mexico, Chile, and Poland. Based on time series and panel data analysis, we find that a high GDP growth rate and increased competition in the banking sector have contributed to increased banking sector credit to SMEs. The findings also reveal that curbing the high inflation rate and reducing government domestic borrowing have significantly encouraged bank lending to the SME segment.

Key words: SME lending, Macroeconomics, Banking sector, Emerging markets, Access to credit.
JEL: G21, G28, O12.

Snabdevanje malih i srednjih preduzeća (SME) spoljnim finansiranjem bila je glavna briga za mnoge vlade i međunarodne organizacije tokom tri decenije. U poslednjih nekoliko godina iskustva emergentnih zemalja ukazuju da se promena paradigme odvija u pravcu finansiranja malih i srednjih preduzeća. Posebno u brzo rastućim emergentnim zemljama kao što je Turska, banke sve više targetiraju mala i srednja preduzeća kao novu liniju bankarskog poslovanja. Ovo istraživanje analizira kako su makroekonomski faktori doprineli povećanju kreditiranja malih i srednjih preduzeća od strane komercijalnih banaka u šest emergentnih tržišnih ekonomija: Turska, Argentina, Brazil, Meksiko, Čile i Poljska. Na osnovu analize vremenskih serija i podataka panela, nalazimo da su povećanje stope rasta GDP-a i povećana konkurencija u bankarskom sektoru doprineli povećanju kredita bankarskog sektora ka malim i srednjim preduzećima. Rezultati takođe ukazuju da suzbijanje visoke stope inflacije i smanjenje državnog nacionalnog zaduživanja značajno ohrabruju bankarsko kreditiranje malih i srednjih preduzeća.

Ključne reči: Mala i srednja preduzeća, pozajmljivanje, makroekonomija, banke, emergentna tržišta.