Unlocking Bank Credit Access for Sustainable Italian Smes : Challenges and Solutions

The attention paid to environmental, social and governance (ESG) issues has been increased under the pressure of legislative interventions. This paper aims to test whether firm sustainable business models positively affect access to bank credit carrying out a panel data analysis of 125 listed Italian SMEs from 14 regions over the period 2017–2021. A quantitative score comprising 20 items grouped into three areas - Disclosure, Processes and Governance - is computed to determine the level of implementation of sustainable practices in the business model within the sampled firms. The results show that more sustainable orientation can effectively improve bank credit access by SMEs and the ability to pay the cost of its bank debt. In turn this contributes to reinforce the bank-firm relationship. This study helps integrate the body of literature on SMEs, shedding light on the relationship between the availability of bank loan and sustainability