The Impact of the COVID19 Pandemic on the Credit Market in Poland
Purpose: The paper aims to evaluate the impact of the COVID-19 pandemic on the credit market in Poland. Design/Methodology/Approach: The evaluation of the outcomes of the pandemic on different segments of the credit market in Poland. Findings: The pandemic of COVID-19 had a significant impact on the credit market in Poland. The rise in risk in the economy due to pandemic restrictions on economic activity prompted commercial banks to tighten their lending standards and terms. Demand for credits was affected by the drop in investment and the negative future expectations of economic agents. The central bank eased its monetary policy considerably at the beginning of the pandemic, what with the parallel decrease in credit demand caused the gradual fall in interest rates. Although hugely lower interest rates, the value of credits financing activity of enterprises and households’ consumption remained below the 2019-year level. What is worth noting, except for the first months of the pandemic, the trends in the value of the new corporate and consumption credits were like trends in the previous year. In the period December 2019 to the end of January 2021, the debt of non-financial agents in total increased by approximately 0.9%. However, it stemmed only from the growth of debt from real estate credits. The debt due to the other credits decreased. The highest drop occurred in the micro-enterprise sector. Practical Implications: Assessment of the response of credit market participants, banks and borrowers in the main segments of the credit market to challenges the economy faces due to the COVID-19 pandemic. Originality/Value: To identify and evaluate the effects of the pandemic on the credit market in Poland, the analysis of monthly data was carried out.