Open Access Journal Article

The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies

by Turki Rashed Alshammari a,*
a
Financial Management Program, Department of Business Administration, College of Business Administration, University of Hafr Al-Batin, Hafar Al-Batin, Saudi Arabia
*
Author to whom correspondence should be addressed.
FEL  2025 4(1):40; https://doi.org/10.58567/fel04010001
Received: 26 October 2024 / Accepted: 29 November 2024 / Published Online: 11 February 2025
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Abstract

This study investigates the impact of COVID-19 on bank borrowers across 22 Arab economies from 2017 to 2022, employing the two-step system GMM estimator. The findings reveal a significant negative effect of COVID-19 on the number of bank borrowers, highlighting a sharp decline in borrowing activity due to the pandemic’s economic disruptions. Notably, the decline was more pronounced in non-GCC countries, where economic structures and pandemic responses differed. Robustness tests, including subsample analysis and alternative econometric models (pooled OLS, fixed effects, random effects, and 2SLS), consistently confirm these results. The study emphasizes the need for targeted policy interventions to stabilize financial systems, reduce borrowing costs, and control exchange rate fluctuations to maintain credit access during crises. The findings provide crucial insights for policymakers aiming to support economic recovery and strengthen the resilience of the banking sector in the face of future external shocks.

Keywords: COVID-19; Bank Borrowers; Banking Indicators; Arab Economies;
Copyright: © 2025 by Alshammari. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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APA Style
Alshammari, T. R. (2025). The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters, 4(1), 40. doi:10.58567/fel04010001
ACS Style
Alshammari, T. R. The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters, 2025, 4, 40. doi:10.58567/fel04010001
AMA Style
Alshammari T R. The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters; 2025, 4(1):40. doi:10.58567/fel04010001
Chicago/Turabian Style
Alshammari, Turki R. 2025. "The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies" Financial Economics Letters 4, no.1:40. doi:10.58567/fel04010001

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ACS Style
Alshammari, T. R. The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters, 2025, 4, 40. doi:10.58567/fel04010001
AMA Style
Alshammari T R. The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters; 2025, 4(1):40. doi:10.58567/fel04010001
Chicago/Turabian Style
Alshammari, Turki R. 2025. "The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies" Financial Economics Letters 4, no.1:40. doi:10.58567/fel04010001
APA style
Alshammari, T. R. (2025). The Impact of COVID-19 on Commercial Bank Borrowers in Arab Economies. Financial Economics Letters, 4(1), 40. doi:10.58567/fel04010001

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