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 Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Austria: Bank lending dominates

Most Austrian SMEs depend on banks for funding. And while lending by insurers is emerging, it will be limited to the top end of the borrower market.

Heini Staudinger is hardly a household name in Europe. But the Austrian entrepreneur has been making an awful lot of noise recently about what he regards as the abuse of the Austrian banking industry’s control of the market. Not shy of hyperbole, he thundered recently on his website that "the monopoly of the banks is a danger to our democracy".

At issue is Staudinger’s recourse to friends, family and business connections as a source of funding. Over a period of several years, he is said to have raised about €3 million in this way to fund his shoe-manufacturing business, GEA.

Staudinger calls this crowdfunding. The Austrian Financial Market Authority (FMA) calls it banking. And where there’s a bank, it says, there must be a banking licence. The legal case is still pending, and Staudinger has reportedly said that he is prepared to go to prison to defend his right to raise money from consenting adults.

The authorities, which regard his funding strategy as the thin end of the wedge, believe that the hornets’ nest Staudinger has stirred up has little to do with democracy and everything to do with self-promotion. The Austrian press has described the Staudinger case as the tip of the iceberg, reporting that several other Austrian SMEs are at loggerheads with the authorities about their private funding strategies.

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.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

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

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, 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

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree