The influence of interest rates on outstanding loans of enterprises on their structure in the bankruptcy warning system

  • 693 Views
  • 214 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Small and medium-sized enterprises (SMEs) create more than half of the added value, providing about two-thirds of employment in most countries. However, they need more liquidity, access to credit resources, and significant outstanding loans. This study aims to identify the impact of interest rates on outstanding loans of enterprises on their structure as a way to prevent bankruptcy. The correlation-regression analysis used OECD statistical data for 2008‒2019 sampling individual countries; it showed an ambiguous situation between the interest rate and the share of outstanding loans of SMEs in the overall structure of outstanding loans. The paper verified constructed regression equations and estimated their parameters. The regression equations for Belgium, the Czech Republic, Estonia, and Latvia are statistically reliable. Thus, in Belgium and the Czech Republic, a negative relationship was recorded (r = –0.822; D = 0.675; r = –0.9274; D = 0.794; F-criterion > Ft, respectively), and in Estonia and Latvia – a positive one (r = 0.876; D = 0.767; F-criterion > F•Ft; r = 0.800; D = 0.641; F-criterion > Ft , respectively). Australia, Italy, Slovakia, and France practically do not have a corresponding relationship. The regression equations make it possible to estimate the change in the level of interest rate on the share of outstanding loans of enterprises in the overall structure of outstanding loans, make predictions of the corresponding performance indicator, and develop measures of restoring the solvency of enterprises as an essential task of preventing their bankruptcy.

view full abstract hide full abstract
    • Figure 1. Algorithm for detecting the impact of interest rate on the level of outstanding loans
    • Figure 2. Rates of growth (decrease) in the level of SOLT in 2020 compared to 2010 by individual countries, %
    • Figure 3. The rate of growth (decline) of the IR level in 2020 compared to 2010 by individual countries, %
    • Table 1. The share of outstanding loans of SMEs as a percentage of the total number of outstanding loans and interest rates for SMEs by individual countries
    • Table 2. Impact of interest rate (x) on the share of outstanding loans of SMEs in the overall structure of outstanding loans (Y) by individual countries
    • Conceptualization
      Andrii Butyrskyi, Rodion Poliakov
    • Project administration
      Andrii Butyrskyi
    • Supervision
      Andrii Butyrskyi, Nataliia Prykaziuk
    • Writing – original draft
      Andrii Butyrskyi
    • Writing – review & editing
      Andrii Butyrskyi, Svitlana Lutkovska, Nataliia Prykaziuk, Oksana Lobova
    • Resources
      Svitlana Lutkovska, Nataliia Prykaziuk, Oksana Lobova
    • Software
      Svitlana Lutkovska
    • Validation
      Svitlana Lutkovska, Oksana Lobova
    • Visualization
      Svitlana Lutkovska, Oksana Lobova
    • Data curation
      Rodion Poliakov
    • Formal Analysis
      Rodion Poliakov
    • Funding acquisition
      Rodion Poliakov, Nataliia Prykaziuk
    • Investigation
      Rodion Poliakov, Oksana Lobova
    • Methodology
      Nataliia Prykaziuk