German SMEs are very loyal to their principal bank

SMEs have traditionally maintained a close relationship with the banking sector. The ‘principal bank concept’ is widespread in the SME sector and 93% of all enterprises do business with a preferred credit institution. They have very long-lasting relationships that average 20 years. The special analysis conducted by the KfW SME Panel also found that enterprises seek face-to-face interaction even as the branch network shrinks. In 2017, around 65% of SME managers visited a bank branch at least once, on average once every quarter. In general, diversification in banking increases with the size of the enterprise. Large SMEs maintain more business relationships with banks and savings banks, visit local branches more often and focus less on their principal bank for their borrowing needs.

German SMEs are very loyal to their principal bank(PDF, 225 KB, non-accessible)