Digital Banking Support to Small Businesses amid COVID-19: Evidence from China
Global Financial Stability Notes, June 29, 2021
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- Digital Banking Support to Small Businesses amid COVID-19: Evidence from China
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Bibliographic details
- Authors: Tao Sun
- Published: June 29, 2021
- Series: Global Financial Stability Notes
- DOI: https://doi.org/10.5089/9781513585192.065
Overview
- Author: Tao Sun
- Publication date: June 29, 2021
- Series: Global Financial Stability Notes No 2021/002
- Issue: 002
- Volume: 2021
- Pages: 16
- DOI: https://doi.org/10.5089/9781513585192.065
- Stock No: GSNEA2021002
- ISBN: 9781513585192
- ISSN: 2791-3112
- Subject: Corporate finance, COVID-19, Economic sectors, Financial crises, Financial institutions, Health, Loans, Small and medium enterprises
- Keywords: borrowing decision, Corporate finance, COVID-19, credit demand, digital bank, digital banking, fintech, Global, lending to micro, Loans, micro and small enterprises, Small and medium enterprises, technology firm
Key findings from the China evidence
- Digital banks were able to remotely evaluate borrowers during the coronavirus disease (COVID-19) pandemic.
- Digital banks were able to sustain lending during the pandemic.
- Digital lending facilitated business continuity for micro and small sized enterprises (MSEs).
- Digital lending supported sales growth for MSEs.
- Digital lending enhanced financial inclusiveness of MSEs.
- The analysis is preliminary and based on a large pool of MSEs served by a digital bank.
Policy implications and recommendations
- Implement a policy framework that leverages the advantages of digital banks to support small businesses during and after the COVID-19 pandemic.
- Empower digital banks as part of the framework to enhance support to MSEs.
- Guard against possible financial stability risks associated with digital banking while expanding support.
Contextual summary
- The note analyzes the economic impact of digital lending to micro and small sized enterprises (MSEs) in China during COVID-19.
- In the global context, a balanced policy approach—combining empowerment of digital banks with safeguards against financial stability risks—would further support small businesses.
Digital Banking Support to Small Businesses amid COVID-19: Evidence from China — Global Financial Stability Notes No 2021/002, Tao Sun, June 29, 2021.
Content in this bundle
- Introduction: Small Business Financing Needs An Innovative Approach