The Small Business Act (SBA) Fact Sheets indicates that progress in this policy area has stalled. Two of the indicators measuring lending conditions stand out for negative reasons. Firstly, the share of loan applications rejected by banks is higher, at 20%, than the EU average of 15%. Secondly, and of greater concern, the cost of credit for small businesses in Denmark is 50% higher than for larger enterprises, and this gap is twice as large as in the EU, on average. The other indicators on access to finance show a more positive situation. In particular, the better availability of venture capital is likely to increase the chances of growth for highly innovative companies in the early stages of development. Finally, the liquidity problems posed by payment delays are less severe in Denmark than in the other EU countries.
To improve access to finance, the Danish government has taken an interesting policy initiative by establishing a public-private capital fund, the Danish Growth Capital (Dansk V�kstkapital). This initiative is an agreement between the Danish Ministry of Business and Growth and various Danish pension funds where the latter take on the role of venture capitalists, providing funding for new and small businesses with growth potential. The objective of this initiative is to provide better access to finance for these types of firms, creating more jobs in Denmark in the process.
The newest policy initiative is the Development Package (Udviklingspakken) from March 2012 launched in order to strengthen especially Danish SMEs' access to finance. The package among other things contain (i) strengthening of a Danish loan guarantee scheme; (ii) a new loan scheme from the Danish Growth Fund and (iii) strengthening of existing export guarantee schemes that also helps SMEs in their internationalisation strategies. The Danish government has also expanded the target group of the Danish Growth Fund in June 2011 in order for firms with up to 250 employees to access to financial support and guarantee schemes that are administered by the Danish Growth Fund.
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 EVCA data
Download data [191 KB]
Appendix: ACTIONS SUPPORTING ACCESS TO FINANCE FOR SMEs (PDF) [295 KB]