“Access to finance of SMEs: What can we learn from survey data?” Access to credit for Italian Firms: New Evidence from the ISTAT Confidence Surveys

Since the beginning of the recent recession, there has been a growing interest in timely information about lending conditions in the corporate sector: indeed, access to credit is one of the main channels through which a financial crisis may spread to the real sector of the economy. This may be particularly true in the case of Italy, where banking credit is by and large the main financing channel for firms: in the presence of a bank-oriented industry, any contagion on the inter-banking market could indeed put at risk the principal source of external finance, especially for SMEs (see on this Panetta and Signoretti, 2010 and Beck et al. 2006). On the basis of these considerations, since March 2008 a special ad hoc section reporting information on firms’ perceptions about credit access conditions was added to the Italian ISTAT Confidence surveys on the Manufacturing and Services sectors; since May 2009 the questions were extended to the Construction sector survey. Surveys ask firms about credit conditions they are experiencing on financial markets: hence, data concerns credit demand, complementary to the supply side information obtained from other sources such as the Bank Lending Survey (BLS, see de Bondt et al. 2010; Del Giovane et al. 2010). Our aim is to analyse possible correlates of the probability for a firm to face worsening credit conditions, credit restrictions or credit rationing. In doing this, we use information on a variety of firm’s characteristics available from the surveys, including firm size in terms of employees, sector and location of activity, firms’ assessment on demand and production activity, export share on turnover and productive internationalisation (offshoring). More specifically, following the analysis of Rottman and Wollmershaumer (2010) based on IFO survey data, we estimate the probability that a firm with healthy current business conditions and good outlook for the future will report restrictive credit supply policy, with a particular focus on the evolution of credit conditions during the crisis for SMEs. To the best of our knowledge, this represents the first study providing a timely analysis of the bank-firm relationship from a borrower perspective for Italy, also considering the peculiar role of SMEs in the Italian industry and the effects of the crisis on their credit conditions and perspectives.