SMES’ FINANCIAL CONDITIONS IN ROMANIA AND CENTRAL AND EASTERN EUROPE: BETWEEN PANDEMIC EXPANSION AND ADJUSTMENT CONTRACTION
SMES’ FINANCIAL CONDITIONS IN ROMANIA AND CENTRAL AND EASTERN EUROPE: BETWEEN PANDEMIC EXPANSION AND ADJUSTMENT CONTRACTION

Summary/Abstract: This study examines the evolution of financial conditions for small and medium-sized enterprises (SMEs) in Romania in comparison with Poland, Hungary, and the Czech Republic over the period 2019-2025, focusing on the effects of macroeconomic shocks and changes in monetary policy on the cost and availability of financing. The analysis covers four distinct phases: the pre-shock period, the pandemic shock, the energy shock, and the monetary adjustment phase, highlighting the contrast between pandemic-driven expansion and adjustment-induced contraction. Four categories of indicators are employed: benchmark interbank rates (ROBOR, WIBOR, BUBOR, PRIBOR, and EURIBOR), the spread between interest rates on new SME loans and the monetary policy rate, lending volumes, and the comparative cost of credit across the region. The results indicate a significant deterioration in financing conditions following a period characterized by abundant liquidity and low borrowing costs, driven by rising interest rates and monetary policy tightening. Compared with Poland and the Czech Republic, Romania experienced a slower adjustment of monetary conditions, reflected in the persistence of relatively high interbank rates and financing costs for SMEs. Lending activity slowed considerably, while the interest rate spread widened during the monetary adjustment phase, suggesting a sustained transmission of financing costs to the SME sector. The study highlights the existence of regional differences in the monetary policy transmission mechanism and confirms the high sensitivity of SMEs to changes in financial conditions. It also contributes to the literature on SME financing in Central and Eastern European economies and provides support for the design of policies aimed at strengthening the financial resilience of this sector.

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