## Digital Banking Support to Small Businesses amid COVID-19: Evidence from China

_Global Financial Stability Notes, June 29, 2021_

## Source details

**Canonical URL:** [Digital Banking Support to Small Businesses amid COVID-19: Evidence from China](https://www.imf.org/en/publications/global-financial-stability-notes/issues/2021/06/29/digital-banking-support-to-small-businesses-amid-covid-19-460500)

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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

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### 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.*

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## Content in this bundle

- **Introduction: Small Business Financing Needs An Innovative Approach**
  - [Introduction: Small Business Financing Needs An Innovative Approach (Markdown version)](/-/media/files/publications/gfs-notes/2021/english/gsnea2021002.pdf.md){rel="alternate" type="text/markdown"}
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_Source: https://www.imf.org/en/publications/global-financial-stability-notes/issues/2021/06/29/digital-banking-support-to-small-businesses-amid-covid-19-460500_