In dollarised economies, the absence of autonomous monetary policy shifts the burden of macroeconomic adjustment onto the banking system, where deposits and credit constitute the principal channel through which liquidity is conveyed to commercial activity. The literature has documented this relationship using aggregate national data, yet its behaviour at the monthly provincial scale remains underexplored for Latin America, particularly in fully dollarised economies and over recent periods marked by severe shocks. This article addresses that gap for Ecuador using a monthly panel of its 24 provinces over 2019–2025, estimated as a Panel VAR by two-step GMM, with monthly sales declared to the Internal Revenue Service used as a high-frequency indicator of provincial economic activity. The pandemic is incorporated as an exogenous control. The theoretical framework combines the supply-leading hypothesis, the credit-channel literature on transmission lags arising from financial frictions, and financial intermediation theory on liquidity and asset transformation. The system exhibits a predominantly supply-leading dynamic: deposits and credit retain predictive capacity over provincial sales, with no robust evidence of reverse feedback. Transmission speed is heterogeneous across channels. Deposits affect sales with a one-period lag, whereas credit requires an additional period—a pattern consistent with the differential role of each channel in banks’ asset-transformation function. The provincial-scale evidence for a dollarised economy shows that the macroeconomic relevance of financial intermediation depends on the heterogeneous transmission speeds of its components, with implications for territorial policy.

Over the past decade, the microcredit portfolio extended to women has grown strongly across Latin America, yet the empirical literature has yet to deliver a consistent verdict on its aggregate effect. Macroeconomic studies typically rely on linear specifications that do not allow for dependence on the state of the business cycle. For Ecuador, moreover, there is no systematic empirical evidence on this link. This study provides the first monthly territorial evidence for a dollarised economy by estimating the dynamic response of provincial sales to changes in the female share of microcredit. We employ a panel local projections framework with a logistic smooth transition function, which identifies contractionary and expansionary regimes without resorting to discrete thresholds. The sample covers the country’s 24 provinces from January 2018 to July 2025, with 2136 effective observations. The results document a sign reversal that depends on the state of the cycle. When the cycle is in contraction, a one-percentage-point increase in the female share is associated with a cumulative fall in sales of up to 0.7 percentage points at 12 months. When the cycle is in expansion, it is associated with a cumulative increase of up to 0.5 percentage points over the same horizon. These findings indicate that the transmission channel is state-dependent in sign as well as in strength: the response reflects the cyclical conditions and the productive structure into which the credit is placed, rather than any intrinsic attribute of lending to women. In low-activity phases, gender-focused financial inclusion could be coordinated with countercyclical public policy so that its transmission to real activity operates in an expansionary direction.

This study examines the dynamic relationship between deposits, credit and sales across Ecuador’s provinces over the period 2019-2025 using a Panel VAR model estimated by two-step GMM. Sales declared to the Internal Revenue Service are employed as a high-frequency administrative indicator of provincial economic activity. The results are consistent with a predominantly supply-leading structure, in which deposits and credit exhibit predictive capacity over provincial sales, with no robust evidence in the reverse direction. The speed of transmission differs between the two financial channels. De-posits affect sales with a one-period lag, whereas credit does so with two, suggesting that liquidity is channelled toward commercial activity more immediately than credit financing. During the pandemic period, an increase in deposits, a contraction in credit, and a decline in sales are observed. The study provides subnational evidence for a dol-larized Latin American economy and covers a recent period marked by an extraordinary shock. The findings indicate that the relevance of financial intermediation for territorial economic activity depends not only on the direction of the linkage but also on the dif-ferentiated speed of its components.