FRANKFURT (MNI) – A growing proportion of small and medium-sized
enterprises (SMEs) reported difficulty optaining bank loans between
April and September compared to the second half of last year, the
European Central Bank said on Thursday.

Citing the results of its most recent survey on SME access to
finance, conducted between August 22 and October 7 2011, the ECB
reported that a net percentage of 14% of firms complained of
deterioration in the availability of bank loans, up five percentage
points from H2 2010.

Credit availability also got tighter for large firms, with a net
10% reporting greater difficulty, up from 6% in the second half of 2010.

Over the same period, 16% of SMEs cited “access to finance” as
their biggest problem, unchanged from the last survey. That made it the
“second most pressing problem” after “finding customers,” which was
identified by 23% of SMEs as their biggest concern.

With 11% of large firms cited in the survey listing access to
funding as their biggest worry, it “appears to be a more severe concern
for SMEs”, the ECB said.

Moreover, a net percentage of 20% of SMEs noted a decline in banks’
willingness to provide them with funds, the central bank said.

“Hence, having made a less negative assessment of banks’ willingess
to provide loans in 2010, SMEs appear once again to have experienced
more constraints in obtaining loans in 2011,” according to the ECB
report. “Nevertheless, the degree of deterioration in H1 2011 was not as
strong as it was in 2009 (25% in net terms in both H1 and H2).”

The report also showed that 30% of SMEs said the deteriorating
economic outlook was the main factor hindering the availability of
external financing, up from 19% from the last poll in H2 2010.

Big firms appeared to encounter fewer obstacles in obtaining loans
than the SMEs: a net percentage of only 8% complained of banks’
unwilling to extend loans to them (up from 4% in 2H10). As with the
SMEs, 30% of large firms attributed the decline in bank loan
availability to the worsening economic outlook, the ECB survey showed.

The latest ECB survey polled 8,316 firms, of which 92% had less
than 250 employees.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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