Micro-entrepreneurs contract by 30% credits less this year

In July this year, banks granted micro-entrepreneurs by 37 percent fewer loans in terms of numbers and almost 28 percent in terms of value compared to July last year. However, compared to June this year, dynamic growth is already visible in most market segments. On the other hand, the loan quality index for micro-entrepreneurs deteriorates, which means that companies have more and more problems with paying off their liabilities. 

“This may in the future affect the policy of banks towards small businesses and limit the financing of this segment of the economy,” Waldemar Rogowski, PhD, DS, professor at the Warsaw School of Economics, chief analyst of the Credit Information Bureau (BIK), warned.

The lending activity directed by banks to micro-entrepreneurs in the first seven months of 2020 can be divided into three periods: normal – from January to mid-March, lockdown period, i.e. March, April and early May, and the period of economic defrosting. At that time on annual basis, unfortunately, the lending activity of banks decreased significantly, by as much as 32.6 percent. In the first seven months of 2020, banks granted a total of loans in the amount of approx. PLN 9.18 billion.

The declines concern virtually all product segments. In the segment of investment loans, in the period from January to July, banks granted 5,000 loans, which means a decrease by almost 31 percent. In terms of value, investment loans amounted to PLN 1.38 billion (a decrease by almost 42 percent). In the case of working capital loans, there were 25,800 of them. (the decrease was 31.7 percent), and totaled almost PLN 4 billion, i.e. by 26 percent less than a year ago. There were about 20,600 loans in the current account for the amount of approx. PLN 2.5 billion (a decrease of 27 percent).

(Newseria)