Research

1. "Impact of the Access to Fogape-Covid Program on Firm Delinquency: Evidence from Commercial Loans within the Banking System" Documentos de Trabajo, Comision para el Mercado Financiero, No. 05/24 . (2024), with Cristian Rojas.

One of the most used arguments for delivering Public Credit Guarantee Schemes (PCGS) is to ensure the financing of distressed firms during financial crises. However, there is not much evidence of how this affects firms' future capacity to meet their debt obligations, which differs from the guaranteed loan. For this purpose, we analyze a set of firms that accessed the Fogape-Covid Program, one of the most relevant PCGS in Chile during the pandemic, and compare their future loan banking payment behavior with those that demanded but did not access the guaranteed loan. The results indicate that access to the Fogape-Covid diminishes the probability of delinquency in both the short term (2pp) and the medium term (5pp), compared to similar firms that demanded the credit but did not receive it. This effect persists for over two years following the credit allocation. The impact is also negative compared to eligible firms that did not demand credit. Additionally, we find evidence that credit access is relevant for micro and small firms, consistent with the fact that these firms face financial restrictions and lower financial access to the traditional loan market. Furthermore, we find that the amount of guaranteed credit is also significant in reducing the likelihood of delinquency. Finally, we show that access to Fogape-Covid reduces the probability of facing a deterioration in the Internal Risk Classification (IRC) that banks assign to these firms in both the short and medium term.