Access to credit remains difficult for German businesses. The credit constraints perceived by businesses decreased slightly from the record high level in the final quarter. Nevertheless, more than one quarter of small and medium-sized enterprises, or 28.8%, reported that banks were taking a restrictive approach to loan negotiations.

In addition, businesses still have little appetite for borrowing. Despite the sharp increases in credit interest rates, credit demand did not drop any further in the final quarter but remained steady on a low level. The restrictive monetary policy and weak economic outlook are the main factors weighing on the lending business.

KfW-ifo Credit Constraint Indicator Q4 2023(PDF, 166 KB, accessible)