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Access to finance

SME Access to Finance Index (SMAF)

SME Access to Finance Index (SMAF)

The European Commission (EC) developed the SME Access to Finance (SMAF) index to monitor developments in Small and Medium-sized Enterprises’ (SMEs) access to financial resources, and to analyse differences between Member States.

What is SMAF?

The SMAF index provides an indication of the changing conditions of SMEs’ access to finance over time for the EU and its Member States. The index is calculated using a baseline of EU 2007=100, and so allows comparison between countries and across time. The base reference of 2007 deliberately provides a baseline before the onset of the financial downturn.

The index comprises two main elements or sub-indices:

  • Access to debt finance
  • Access to equity finance

These sub-indices are calculated using data from the following sources: European Central Bank (ECB) for debt; European Venture Capital Association (EVCA) and European Business Angel Network (EBAN) for equity; and the EC and ECB’s Survey on the Access to Finance of SMEs (SAFE), for both sub-indices.

The index is a weighted mean of the sub-indices. The sub-indices themselves are weighted means of the indicators that comprise them, with the indicators ‘normalised’1. Appropriate values for the weights are defined based on actual volumes2, the nature of indicators3 and the coverage of indicators4. In general the index largely reflects the importance of debt finance in the area of access to finance: the debt finance sub-index was set to represent 85% of the SMAF weighting. The equity finance sub-index was set to represent 15% of the SMAF weighting.

The composition of the two sub-indices is set out in the diagram below. This sets out the 14 indicators that cover the index, with nine included in the debt finance sub-index and five in the equity finance sub-index.

Finance Sub-index gif - 37 KB [37 KB]

(Click on chart to see a larger version)

Interpreting SMAF

The overall SMAF index and the individual sub-indices present scores for each country, and the EU and Eurozone averages. In interpreting the scores, it is important to bear in mind the following:

  • the reference point in the index corresponds to the EU average in 2007 (100 = EU 2007)
  • low values in the overall Index and individual sub-indices indicate poor performance against the access to finance indicators relative to the EU level in 2007, and vice versa for high values
  • year-on-year increases indicate a relative improvement over time for that particular sub-index or the overall index.

Analysis

The value of SMAF for many EU countries has increased since 2008 when the EU average for SMAF hit its lowest point. For 15 Member States, the SMAF score has increased between 2007 and 2012. The key factor driving this seems to be the fall in interest rates for loans and overdrafts since 2009 for many EU countries, and so this has contributed to an improvement in the debt finance sub-index. Venture capital investment declined significantly between 2007 and 2009, and then remained relatively stable until 2012 when there was another significant decline. Business angel investment has slightly increased between 2007 and 2012, though for some countries there was a peak in 2009 before falling levels in the last two years. As a result of these trends, the equity finance sub-index has, overall, slightly declined since 2007. The improvement in the debt finance sub-index has outweighed the decline in the equity finance sub-index.

The following sub-sections present charts for the SMAF index overall and the individual sub-indices, along with commentary to highlight the key points shown by the data.

SMAF index, per country; 2012

The following chart shows the 2012 SMAF index scores for each of the Member States. The EU index value is 104, indicating an improvement since 2007. Germany, France and Austria are the highest performing countries in terms of access to finance for SMEs, all with an index value of approximately 120 (20 points higher than the EU overall in 2007). Greece, Portugal and Bulgaria have the lowest scores (index values of 78, 85 and 92 respectively).

Index Per Country 2012 gif - 62 KB [62 KB]

(Click on chart to see a larger version)

Download data excel12book - 44 KB [44 KB]

SMAF index; per country; 2007-2012

The chart shows the changes in the overall SMAF index for member states in the period 2007 to 2012. In total, 15 countries have shown improvements in their access to finance environments over the five year period to 2012. In particular significant improvements have been made by Latvia, Lithuania, Netherlands and Croatia. Conversely 13 countries have experienced declines in their access to finance environments since 2007. Notable decreases have been experienced by Cyprus, Denmark, Greece and Italy. The only countries to consistently have an index value of over 110 were Sweden and Austria.

Index Per Country 2007 - 2012 gif - 34 KB [34 KB]

(Click on chart to see a larger version)

Download data excel12book - 45 KB [45 KB]

SMAF index; EU and Euro area; yearly

The chart shows that the SMAF value for the EU declined between 2007 and 2008. From this point the value increased again until 2010, before levelling off. The Euro area average has performed consistently better than the EU average although there was a marked decline between 2010 and 2011 in the Euro area, which narrowed the gap with the EU. The data for 2012 shows a convergence in values for both the EU ad Euro area – implying financial conditions for SMEs are similar inside and outside the Euro area.

SMAF Index Per Euro Area gif - 15 KB [15 KB]

(Click on chart to see a larger version)

Download data excel12book - 46 KB [46 KB]

Sub-index on access to debt finance; per country; 2012

This sub-index is comprised of indicators based on the take-up of different sources of debt finance, SME perceptions of loan finance and actual data on interest rates. The EU sub-index value has increased by five points since 2007. Across Member States, 13 countries have seen their relative performance on this sub-index improve since 2007. Germany and Austria represent the strongest performing countries, whereas Portugal and Greece have the least favourable environment for debt finance.

Sub-index on access to debt finance; per country; 2012 gif - 65 KB [65 KB]

(Click on chart to see a larger version)

Download data excel12book - 43 KB [43 KB]

Sub-index on access to equity finance; per country; 2012

The equity finance sub-index is calculated with data from the European Venture Capital Association and the European Business Angel Network reflecting investment volumes and numbers of deals/beneficiaries. Here Sweden, Finland and Ireland are the strongest performing countries, whereas the Czech Republic and Poland have the least favourable equity finance environments. The EU sub-index value is 98, indicating a slight decline since 2007. Eleven countries have improved relative performance in the equity finance sub-index between 2007 and 2012.

Sub-index on access to equity finance; per country; 2012 gif - 55 KB [55 KB]

(Click on chart to see a larger version)

Download data excel12book - 44 KB [44 KB]

1) Indicators are ‘normalised’ through Winsorisation to reduce the effect of outliers.

2) For example, indicators on loans are weighted higher than indicators on leasing, reflecting that loans constitute a more significant source of external finance for SMEs; and indicators on venture capital are weighted higher than indicators on Business Angel investment.

3) Rates and take-up were weighted more highly than perceptions indicators.

4) The extent to which data is available across all EU Member States. Indicators with greater coverage were weighted more highly.

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