According to the Small Business Act (SBA) Fact Sheets, Germany's performance in access to finance improved substantially in 2011 compared to the previous year. This not only applies to its overall performance relative to its peers - in 2012 Germany moved up from an 'average' to an 'above-EU average' performance level - but also to its performance on almost all individual indicators in this segment. Although Germany does not lead its EU peers in any of the financial indicators, it now clearly outperforms the EU average in two-thirds of them. There was a significant improvement in the share of SMEs that reported a deterioration in the willingness of banks to provide loans (down from 27% to 16% with the EU average only down from 30% to 27% this year). The share of rejected loan applications and unacceptable loan offers also dropped - from 26% to only 8% (much more than the EU average which declined from 22% to 15% in 2011). It should be noted, however, that these year-on-year improvements ended a longer period (since 2007) which saw financing conditions deteriorate in the first phase of the financial crisis.
The only area where Germany still trails its EU peers is loans, which are relatively more expensive for SMEs than larger businesses. The interest rate differential between loans of less than a million euro and those above is still higher in Germany (24%) than in the EU (19%). The margin, however, has come down from almost 29% in the previous year. The good performance is rounded off by above average results for most of the remaining indicators, including those measuring cash flow conditions (average payment delay and share of lost payments), access to venture capital and the depth of credit information. These factors are important for creditors' confidence in lending money to enterprises.
A number of policy measures have been taken recently to improve the situation in this policy area in Germany. In 2011, the Federal Ministry of Economics and Technology, the KfW, and twelve large German companies set up the Second Equity Fund for High-Tech Start-ups. The fund provides early-stage (seed) financing for promising high-tech start-ups. Together with the Entrepreneur Loan programme 'StartGeld', the KfW provides a guarantee for 80 per cent of a loan made by a private bank to a start-up or young company. In spring 2011, the maximum loan amount was raised from 50 000 to 100 000 euro.
Research, articles etc.
|Key indicators on access to finance|
Source: Chart compiled using ECB data
Note: Loan volumes and interest rate data for 2012 are to the period September 2012 only (due to data availability as at November 2012).
Download data [192 KB]
Source: Chart compiled using AECM data
Download data [139 KB]
Source: Chart compiled using EVCA data
Download data [191 KB]
|Business angels finance|
Appendix: ACTIONS SUPPORTING ACCESS TO FINANCE FOR SMEs (PDF) [377 KB]