Iranian Business Management Association International Journal of Resistive Economics 2345-4954 13 3 2025 07 01 The effects of Covid-19 on the lending performance of banks to SMEs: Markov Switching approach 154 164 212297 10.22034/oajre.2024.488711.1097 EN Reza Taheri Haftasiabi , Department of Economic Sciences, Faculty of Management and Economics, Urmia University, Urmia, Iran 0009-0006-6560-1298 Ameneh Naderi Urmia University, Department of Economic Sciences, Faculty of Management and Economics, Urmia University, Urmia, Iran. Yousef Mohammadzadeh Associate Professor, Urmia University, Department of Economic Sciences, Faculty of Management and Economics, Urmia University, Urmia, Iran Journal Article 2024 11 13 Small and medium enterprises (SME) in all societies play a very important role in improvement of economic indicators especially employment. Therefore, supporting these businesses for instance bank loan, can have many positive effects on the entire economy. However, the occurrence of shocks such as spreading of the Covid-19 virus causes high credit risk and some problems for these supports. So, this research has investigated the impact of the Covid-19 virus epidemic on the performance of bank loan to small and medium-sized companies in Iran. In this study, the data of the amount of lending by Iranian banks to SMEs for the period of December 2019 to December 2021 was collected on a monthly basis. Changes in data was affected by the growth of the number of people infected with the virus during this period and it has been analyzed by the Markov regime transfer method. The results showed that when the dependent variable is in its high regime, the growth of the number of people infected with the Covid-19 virus does not have a significant effect on the system. but in the low and medium regime, this variable has a negative and significant effect on the amount of bank loan to SMEs in Iran. In addition, the impact of some variables such as the growth of the exchange rate and the inflation index on the lending performance of banks was also considered during the pandemic. https://www.oajre.ir/article_212297_2510780cdd2288cd6c42e3596f52c47d.pdf