SMEs' Access to Credit: Are Government Measures Helpful for Constrained Firms?

Due to the importance played by SMEs in the european economy, national authorities and govenrments have made recourse to measures to help SMEs in access to credit, in particular by using loan guarantee programs, grants, or subsidized loans. In this chapter we test whether bank-lending constraints increase firm's demand for government aid. We use a sample of euro area SME derived form ECB/EC survey on access to finance for small and medium enterprise (SAFE) for the years 2009-2014 across 11 euro area countries. First we test what type of firms is accessing financial aid and then we verify the relevance of financial constraints. In doing so, we focus the attention on government measures put into practice since 2011. We divide countries that implemented or expanded only guarantee schemes from those that supported firms also with grants and loans.