Le measures taken by the government during the pandemic to support liquidity of businesses have significantly reduced failures, allowing bank lending to companies to return to pre-crisis levels as early as last year. However, a substantial part of the new loans ended up increasing deposits (+42% between 2019 and 2021), which indicates a high degree of uncertainty about future cash flows of companies. It is what emerges from an analysis by the Observatory on Italian public accounts.
Business loans for over 450 billion euros
The study recalls that the main measures introduced by the government to respond to the liquidity risks brought about by the pandemic were two:
- new public guarantees on bank credits;
- a moratorium on bank loans to SMEs.
According to the Observatory, from 17 March 2020 to 31 December 2021 these measures made it possible to activate around 4,4 million operations, for a total amount equal to 452 billion euros.
Credit growth and quality
Despite the recession, therefore, government policy and the ultra-accommodative strategy of the ECB have led bank lending to businesses to increase by 37 billion in 2020and then stabilized the following year on pre-crisis levels.
Moreover, the analysis reads, "no significant tensions were detected on the credit disbursed: in December 2021, out of the 151 billion granted through the SME Guarantee Fund, just 0,5% was classified as non-performing".
The decline in bankruptcies
At the same time, liquidity interventions helped to reduce bankruptcy applications of businesses, which between the first half of 2019 and the same period of 2021 they dropped by 13%, going from 5.380 to 4.700.
Uncertainty and the increase in deposits
Along with loans, however, they have grown considerably too bank deposits of non-financial corporations, which went from 302 billion in 2019 to 428 billion in 2021. According to the CPI Observatory, this increase is attributable to the strong demand for financial resources determined by two factors:
- precautionary needs view the high uncertainty about future cash flows;
- the need to deal with expenses that cannot be deferred in the face of a reduction in revenues and an increase in delays in the collection of trade receivables.
