CREDIT RISK OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE CONDITIONS OF THE COVID-19 CRISIS

Abstract

The subject of the paper is assessment of the credit risk of small and medium-sized enterprises (SMEs) in the conditions of the COVID-19 crisis. The paper gives the overview of the theoretical and professional literature on the existing accounting standards related to the assessment of expected loss and banking regulations in terms of capital adequacy, as well as their applicability in the current crisis. Bearing in mind the share of SMEs in total gross domestic product and employment in emerging and developing markets, and dependence of these companies on bank funding, special attention is paid to the researches dealing with the impact of stress tests and an increase in capital requirements on credit supply. Since the paper was written at a time when the COVID-19 crisis was well under way, and the final effects could not be fully analysed, except for only certain projections, future researches will focus on the effectiveness of the existing credit risk assessment models in crisis conditions.