SME, bad debt, solvency and access to credit during Spain’s current economic crisis

Abstract

The aim of this research is to analyse how Spanish RGSs have developed and the problems they face resulting from an increase in bad debts in the current economic crisis: One of the most noteworthy conclusions is that in the face of current difficulties, the RGS have become all the more significant as they facilitate credit access for SMEs. However, these societies are also affected by the increase in bad debts and the need to keep required solvency ratios in the same way as other financial institutions. We analyse the role of re-warranty packages for covering the credit risk of RGSs and also the solvency of these societies and their level of activity over these years. It is clear that the latest mechanisms to be introduced have been important. Examples of these are: taking into account CERSA re-warranty when calculating the capital compliance ratio and the introduction of different autonomous re-financing models. These measures allow the RGSs to assume greater risk and reinforce their solvency.