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Press Release from 2021-10-26 / Group

KfW SME Panel 2021: SMEs have been hit hard by the coronavirus crisis, but impact remains manageable

  • Rapid expansion of digital sales limited turnover losses to EUR 277 billion
  • Profitability has proven to be crisis-proof and remains stable
  • Equity base has not plunged across the breadth of the sector, but small businesses have taken a hit
  • Capital expenditure has dropped sharply, small crisis adaptation projects predominate

The coronavirus pandemic has hit Germany’s SMEs with full force. Overall, however, companies got through the crisis year 2020 with relatively few bruises. According to the KfW SME Panel 2021, small and medium-sized enterprises (SMEs) suffered turnover losses totalling EUR 277 billion last year. SMEs’ enormous adaptability prevented the worst outcomes. For many, the rapid development and expansion of digital sales channels proved to be a particularly effective lifesaver. Revenues earned through digital sales channels alone were EUR 302 billion, a 24% increase. More than 850,000 SMEs generated turnover through digital channels, around 200,000 more than the year before. Although one in three expect further decreases in turnover during the current year, businesses are reporting an upward trend overall, and medium-term expectations are settling at the pre-crisis level.

The Chief Economist of KfW, Dr Fritzi Köhler-Geib, commented on this development as follows: “Foresight and agility, in other words, typical entrepreneurial traits, have saved the SME sector. Thanks to the solid equity base they built up in previous years and their ability to respond quickly and flexibly to changed demands during the crisis, small and medium-sized enterprises got through the crisis with relatively few bruises despite suffering significant turnover losses.”

SMEs remained profitable despite sharp drops in turnover. The average profit margin fell only moderately (from 7.5% to 7.3%), thus proving to be crisis-proof. The numerous stabilisation and support measures adopted by economic policy-makers to offset turnover losses are likely to have contributed to this. That has so far prevented the widely feared massive depletion of the equity base of broad sections of the SME sector. On average, the equity ratio fell by only a moderate 1.7 percentage points to 30.1%. A closer look reveals a very uneven distribution, however. Large SMEs experienced barely perceptible falls, while small businesses suffered steep declines. Their equity ratio fell to 17.4%, a 15-year low.

The coronavirus crisis dampened SMEs’ investment appetite in 2020. Never before did so many enterprises put their plans on hold, postponing investment worth EUR 61 billion. Numerous businesses drew on funds initially planned for capital expenditure projects to fill their liquidity gap. Major projects were deferred. Small projects designed to quickly adapt to the crisis situation, on the other hand, dominated investment activity (for example hygiene practices, digitalisation). New investment fell by 7% across the year and in all segments. The decline appears to be on a similar scale in 2021.

Dr Fritzi Köhler-Geib remarked: “In light of the crisis, it is understandable that SMEs are reluctant to invest. That needs to change urgently. The transformation to a climate-neutral and sustainable economy is on the agenda, and many businesses have much catching up to do in digitalising operations. In order to manage this, they will have to show the same strengths that have brought them through the crisis. Policymakers have to provide a reliable economic policy framework and give them targeted support in carrying out necessary investments.”

The KfW SME Panel 2021 is available for download at www.kfw.de/mittelstandspanel.


Portrait Wolfram Schweickhardt


Wolfram Schweickhardt


+49 69 74 31 17 78


+49 69 74 31 32 66