| dc.description.abstract | This research aims to study the characteristics of relief loan borrowers by using the borrowers’ data from a branch of Bank A during the COVID-19 pandemic time. The research questions are as follows. First, I investigate firms in which industries have been more negatively impacted, and if the governmental policy regarding relief loans are helpful for those firms. Second, I study whether Bank A is able to balance out the opportunity of developing business relations with those relief loan borrowers, while can still keep its level of lending risk under control. Finally, I conduct a SWOT analysis for Bank A which specifically focuses on the borrowers’ characteristics during the COVID-19 pandemic time, so as to provide suggestions for Bank A’s possible future business direction.
This study employs the de-identified financial data of companies applying for relief loans in 2020 and 2021 from a northern branch of Bank A. My main research conclusions are as follows:
1.Firms in the “accommodation and catering” industry are greatly impacted during the pandemic, followed by those in the “wholesale and retail” industry, as well as those in “other service” industry as they mostly rely on demand from domestic markets.
2.Bank A’s lending risk is limited although it has adopted looser standards for lending the relief loans, since the lending decisions still depends on clients′ credit status and predicted revenue that business may earn after they receive the loans.
3.Although most relief loan borrowers do not have the best credit records, Bank A has approved their applications if they meet the minimum underwriting standards that issued by the Credit Insurance Fund, as a part of those loans will be guaranteed by the Fund. This demonstrates the coordination among institutions under the supervision of government has helped the distressed firms during the pandemic time.
4.The policy implication of this study are as follows. On the one hand, in addition to the relief subsidies, the government could also work on guiding distressed firms to improve their competitiveness. On the other hand, it is suggested that these firms may consider strategies which allow them to improve their business after obtaining the relief funds.
5.After approving more relief loan applications, Bank A has indeed won some new business clients. However, in order to establish long-term relationships with these new clients, it is recommended that Bank A strengthens its provision of FinTech services, and probably refocus its business scope by including these young clients with smaller size of businesses. | en_US |