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dc.titleThe Causal Impact of Covid-19 Government-backed Loans on MSMEs Liquidity and Earnings
dc.contributor.authorCerda, Maikol
dc.contributor.authorGertler, Paul
dc.contributor.authorHiggins, Sean
dc.contributor.authorMontoya, Ana María
dc.contributor.authorParrado, Eric
dc.contributor.authorUndurraga, Raimundo
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageChile
dc.coverageColombia
dc.date.available2023-02-24T11:19:58
dc.date.issue2023-02-22T00:02:00
dc.description.abstractWe conducted two randomized controlled trials (RCTs) to evaluate the impact of government-guaranteed loans offered by the Chilean and Colombian governments. The public funds of these programs greatly expanded following the start of the Covid-19 pandemic and offered loans to Micro, Small and Medium Enterprises to mitigate the negative impact of the shock. Through a collaboration with private banks, we launched two experiments which offered loans to a sub-set of the 10,072 Chilean and 3,079 Colombian small businesses that took part in our experiments. Most of these firms had previously applied for a loan during the pandemic--but prior to the RCTs--but were rejected by banks due to their risk analysis of the firms. With take-up rates of 27% and 29%, respectively, we find that Covid-19 loans had a significant positive impact on the total liquidity that treated MSMEs could access: total liquidity with the formal banking system increased by 15.7% (statistically significant at the 1% level). The results of our RCTs will inform Latin American governments concerning their strategies to support MSMEs via government-backed loan programs and will shape similar public policies in the future.
dc.format.extent81
dc.identifier.doihttp://dx.doi.org/10.18235/0004754
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Causal-Impact-of-Covid-19-Government-backed-Loans-on-MSMEs-Liquidity-and-Earnings.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.relation.seriesImpact Evaluations
dc.subjectRandomized Controlled Trial
dc.subjectSmall Business
dc.subjectBank Loan
dc.subjectEconomy
dc.subjectCoronavirus
dc.subjectPandemics
dc.subjectLiquidity
dc.subjectImpact Evaluation
dc.subject.jelcodeJ16 - Economics of Gender • Non-labor Discrimination
dc.subject.jelcodeL26 - Entrepreneurship
dc.subject.jelcodeP52 - Comparative Studies of Particular Economies
dc.subject.keywordsRCT;Government-guaranteed loans;COVID-19 pandemic;Eventstudy;Impact Evaluation
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01430
idb.operationRG-E1704
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