Impacts of the Basel III agreements on the The SME’s credit supply of: a panel analysis on Moroccan data

Abstract

This paper studies the impact of the Basel III agreements on loan offer to Moroccan SMEs via an econometric model. The question is of capital importance in a context which follows the crisis of 2007, and which requires the reinforcement of the regulatory system in adequacy with the international measures, but which intervenes within the framework of a contraction of the bank financing implied by the recession accentuated by the covid19 crisis, the issue of ex-ant evaluation of the possible impacts of the implementation of Bale III on SMEs, is likely to provide a clearer vision before the full deployment of such a measure. Study combines data specifically to Moroccan SMEs from a large local bank, with characteristic data of the bank in question from the latter's official publications, after associating this data with proxies representing the variables introduced by Bale III in a fixed effect panel model. According to our results, the new regulations have a negative impact on SMEs during the period 2011-2016. The Leverage ratio has the greatest negative impact, followed by the short-term liquidity ratio, while the long-term liquidity ratio has a slight negative effect which may be insignificant in particular due to its non-entry into force according to our results.