Research

Abstract: This paper examines the causal effects of macroprudential policies (MaPs) on credit constraints faced by small and medium-sized enterprises (SMEs), considering both bank and non-bank financing channels. Using firm-level survey data, we show that tighter MaPs significantly worsen SMEs’ access to bank finance. Specifically, macroprudential tightening leads to higher borrowing costs, shorter maturities, and smaller credit volumes. These effects are driven primarily by bank credit lines, while traditional bank loans remain largely insensitive to MaPs. Moreover, micro and small firms are more adversely affected than medium-sized firms, consistent with a flight-to-quality effect in bank lending. The impact of MaPs is also stronger for capital-intensive SMEs, indicating that asset-based lending constitutes an important transmission channel. Beyond bank finance, we find that tighter MaPs exacerbate credit constraints in trade credit markets, suggesting that regulatory tightening propagates along supply chains rather than being fully offset by non-bank finance. However, this adverse effect is weaker for firms with access to a broader set of alternative capital market financing options. Finally, we document significant inward spillovers from foreign macroprudential policies: tighter MaPs abroad alleviate domestic SMEs’ credit constraints, partly by reducing interest rate pressures. Overall, the results highlight important trade-offs between financial stability objectives and SMEs’ access to external finance, as well as the role of cross-border spillovers in shaping firm-level credit conditions.