The impact of Brexit on SME lending in the UK

Soner, C, Alsakka, R and Mantovan, N ORCID: 0000-0002-5930-4880 (2025) The impact of Brexit on SME lending in the UK Journal of Rural Studies, 118. p. 103683. ISSN 0743-0167, 1873-1392

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Abstract

Using a difference-in-differences model, we find a significant 1.2 % (4.8 %) quarterly (annual) lending contraction to Small and Medium-Sized Enterprises (SMEs) in the UK following the Brexit vote compared to similar European countries. This impact persisted in several quarters, particularly during key Brexit milestones, reflecting the prolonged uncertainty induced by Brexit. Within-country analysis, using postcode-level data, reveals severe loan contractions in rural and peripheral areas, as well as in regions with high EU export proportions, highlighting regional disparities in Brexit's impact on SME lending. Our findings emphasize the importance of economic geography and the role of local conditions in shaping access to finance during shocks. These results call for regionally tailored policies that specifically address the resilience and financial challenges faced by SMEs in rural and peripheral regions, to foster economic recovery across the UK in the post-Brexit era. Our research contributes to the literature on regional resilience and finance, with implications for policymakers aiming to mitigate the unequal impacts of economic shocks.

Item Type:	Article
Uncontrolled Keywords:	4406 Human Geography, 44 Human Society, Health Disparities and Racial or Ethnic Minority Health Research, Health Disparities, 8 Decent Work and Economic Growth
Divisions:	Faculty of Humanities & Social Sciences Faculty of Humanities & Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	23 Apr 2025 08:30
Last Modified:	24 Jan 2026 05:12
DOI:	10.1016/j.jrurstud.2025.103683
Related Websites:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3191499
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