Richard E. O. Pearce, Abdullah Bah


The objective of this study is to investigate the impact of COVID-19 on Small and Medium Enterprises (SMEs) access to finance, measured as access to bank credit, for expansion of business. A survey was conducted with a total of 450 registered SMEs randomly selected from the list of registered SMEs in the Western Area of Sierra Leone for the years 2018, 2019 and 2020. The model draws from El-Said et al. (2013) approach. We also applied a quantitative approach, through the estimation of a probability model for the access to finance determinants. However, we used a panel data framework where we investigated the determinants of access to bank credit for the periods 2018, 2019 and 2020, which are the most recent three-year periods prior to our survey. We also investigated whether this access was stronger during the COVID-19 pandemic period (2020) than the 2018 and 2019 which were pre-pandemic periods. The results show that the year COVID-19 (2020) has the same chance of getting a bank loan as the pre-COVID-19 years (2018 and 2019), in spite of the business uncertainty and the downturn associated with such a pandemic. In this regard, a robust mechanism for strong SME support outside the bank is imperative. This requires strong government and donor support, driven by coordination among the Ministry of Trade, Central Bank, Ministry of Finance, SMEDA and donor partners. The process may require a strong FinTech application in a peer-to-peer framework to achieve its goal efficiently.

JEL: F13, F15


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COVID-19, small and medium enterprises, access, finance, Sierra Leone

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