Bloomberg News

ECB Says Small, Medium-Sized Firms Report Worsening Loan Access

April 27, 2012

The European Central Bank said small and medium-sized companies in the euro region predict access to bank funding will worsen in the next six months.

The companies expect access will deteriorate a net 7 percent for bank loans and a net 8 percent for bank overdrafts between April and September, according to a survey of 7,511 firms conducted between Feb. 29 and March 29. Small- and medium- sized companies, or SMEs, perceived a net worsening of 20 percent in the supply of bank loans between October 2011 and March 2012, the ECB said in an e-mailed report today.

The ECB has flooded financial markets with more than 1 trillion euros ($1.3 trillion) in cheap three-year loans to unlock credit in the 17-member economy. ECB President Mario Draghi said on April 4 the tenders were designed in a way to allow banks that are close to SMEs to access the funds.

Companies reported a net increase in their need for bank loans, possibly reflecting lower profits, the ECB said. Rising demand may also reflect “high uncertainty with respect to available bank funding sources,” it said.

Demand for bank loans increased “broadly” across euro- region countries, most strongly in Greece and Italy and, to a lesser extent, in Portugal, the ECB said. Dutch and Austrian SMEs reported a net decline in demand, the ECB said.

About 93 percent of the companies surveyed have less than 250 employees, according to the report.

To contact the reporter on this story: Jana Randow in Frankfurt at

To contact the editor responsible for this story: Craig Stirling at

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