The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

SME finance: Weak loan demand is the real problem, say banks

In November, the European Central Bank published the findings of its latest survey of SMEs in the euro area. It contacted over 8,000 firms, the vast majority with fewer than 250 employees, and concluded with the headline that the dominant concerns for these companies was finding customers and access to finance.

Surely a sufficiency of the first is usually a prerequisite for the latter.

The responding SMEs reported a net increase in their need for financing, with the difference between those reporting an increasing need and a decreasing need standing at five percentage points. They also reported a slight deterioration in availability of credit, with 12% reporting applications for loans had been rejected, up from 11% during the previous survey period six months earlier. The percentage of SMEs reporting access to finance as their main problem remained broadly stable at 16%.

Armed with these numbers and citing a European Commission study from 2012 that found SMEs employ 70% of the region’s workers, Yves Mersch, executive board member at the ECB, warned: "Europe should be very concerned by the difficulties that SMEs are currently facing – in particular those in countries under stress. Firms have been forced to close not only because business models were flawed, but because they were located in the wrong place and could not get access to finance."

Dig deeper into the ECB’s survey and the picture becomes muddier. It shows a substantial decline in loan availability for SMEs in Italy, but marginal improvements in much of the rest of the periphery, notably Portugal and Spain, and abundant availability in Germany, Austria and Finland.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?