Zhao, Tianshu, Matthews, Kent  ORCID: https://orcid.org/0000-0001-6968-3098 and Munday, Maxim ORCID: https://orcid.org/0000-0001-9067-2481
2023.
Neither true nor fairweather friend: relationship banking and SME borrowing under Covid-19.
European Journal of Finance
29
(16)
, pp. 1957-1974.
10.1080/1351847X.2022.2092415
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Abstract
A growing literature addresses the costs and benefits associated with relationship banking, particularly for smaller firms, but with much of this work focused on normal trading conditions. Covid-19 provides an ideal testbed to explore the resilience of relationship banking. We examine whether the presence of closer pre-Covid ties between SMEs and their banks helps in accessing funds in the Covid-19 pandemic period. Then are ties between relationship bankers and SME borrowers a case of ‘true love’ or rather are the parties more akin to ‘fair-weather friends?’ Data from the UK SME Finance Monitor from 2018Q2-2020Q3 is used in this paper to examine this question. Our analysis suggests that relationship banking was important for the acquisition of bank credit pre-Covid-19 but was of limited influence in post-Covid-19 lending behaviour. Banks treated SMEs that had a good relationship with them in the same way as those that did not and with public interventions to support lenders material in this.
| Item Type: | Article |
|---|---|
| Date Type: | Publication |
| Status: | Published |
| Schools: | Schools > Business (Including Economics) |
| Subjects: | H Social Sciences > HG Finance |
| Publisher: | Routledge |
| ISSN: | 1351-847X |
| Date of First Compliant Deposit: | 17 June 2022 |
| Date of Acceptance: | 23 May 2022 |
| Last Modified: | 04 Oct 2023 18:48 |
| URI: | https://orca.cardiff.ac.uk/id/eprint/150577 |
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