Centre for Entrepreneurship, SMEs, Regions and Cities
The impact of COVID-19 on SME financing
A special edition of the OECD Financing SMEs and Entrepreneurs Scoreboard
The COVID-19 crisis has had a profound impact on SME access to finance. In particular,
the sudden drop in revenues created acute liquidity shortages, threatening the survival
of many viable businesses. The report documents an increase in demand for bank lending
in the first half of 2020, and a steady supply of credit thanks to government interventions.
On the other hand, other sources of finance declined, in particular early-stage equity.
This paper, a special edition of Financing SMEs and Entrepreneurs, focuses on the
impacts of COVID-19 on SME access to finance, along with government policy responses.
It reveals that the pre-crisis financing environment was broadly favourable for SMEs
and entrepreneurs, who benefited from low interest rates, loose credit standards and
an increasingly diverse offer of financing instruments.
It documents the unprecedented scope and scale of the policy responses undertaken
by governments world-wide, and details their key characteristics, and outlines the
principal issues and policy challenges for the next phases of the pandemic, such as
the over-indebtedness of SMEs and the need to continue to foster a diverse range of
financing instruments for SMEs.
Published on November 17, 2020Also available in: French