KfW SME Panel 2025: SMEs display resilience in an economically difficult time

• Overall SME turnover is up slightly
• Germany’s ‘Mittelstand’ employs more people than ever before – more than 33 million for the first time
• Investment appetite remains very low

Small and medium-sized enterprises in Germany have recently shown themselves to be stable despite strong economic headwinds. In 2024, the total turnover of the 3.87 million SMEs grew slightly by two per cent to EUR 5.2 trillion. On a price-adjusted basis, that was a small drop of one per cent, but in the previous year the decline was a notable ten per cent.

SMEs again presented themselves as the employment engine of the German economy. Never before did so many people find employment in a small or medium-sized enterprise, with the total workforce climbing by 207,000 to 33.01 million people. In the past twenty years, employment in SMEs thus grew by around seven million people.

These are the findings of the KfW SME Barometer, the only representative survey covering the entire German SME sector. It includes enterprises with a turnover of up to EUR 500 million. The survey was conducted from February to June 2025 and was supplemented by a special survey in September 2025.

Businesses increased their average equity ratio slightly to 30.7 per cent in 2024. The share of inadequately capitalised SMEs with equity ratios of below ten per cent fell noticeably by 5.2 percentage points to 28.4 per cent. Only six per cent of businesses reported a negative equity ratio, half the rate of the previous year.

“The public discourse in Germany tends to focus on large enterprises. Yet it is the small and medium-sized enterprises that play a pivotal role in shaping Germany as an economic hub,”

said Dr Dirk Schumacher, Chief Economist of KfW.

“It is therefore important for policymakers to always keep these enterprises in mind as they work to cut red tape, facilitate investment and lower costs.”

The profitability of SMEs was steady, as their average profit margin stood at 7.0 per cent in 2024. That means an enterprise generated a profit of seven cents for every euro of turnover. In a historical comparison, profitability is thus well above the levels of the 2000s but below those of the years 2015 to 2021.

Nonetheless, the share of businesses referred to as zombie enterprises increased. These are companies that do not generate enough cash flow to meet their interest payment obligations. The share of enterprises with such a critically low debt servicing capacity was 3.6 per cent in 2024, after a record low of 2.6 per cent the year before. But that rate was still low in a long-term comparison. In 2010, it stood at 9.1 per cent.

What is clear, however, is that the interest burden on enterprises is significantly higher than some years ago as a result of monetary policy conditions. On a positive note, the success rate of SMEs in loan negotiations with banks and savings banks is on a high level and the rate of loan denials has fallen.

Nonetheless, the investment appetite of small and medium-sized enterprises remains weak. Only 39 per cent or 1.51 million businesses implemented investment projects. That was the same rate as the year before, which is close to the all-time low.

“SMEs are displaying great resilience even in economically challenging times. But that does not mean that they are doing really well. Businesses are suffering from rising costs, which is putting pressure on returns, and their investment appetite is weak. For Germany as a business location, it is essential for the ‘Mittelstand’ to gather strength again,”

said Dr Dirk Schumacher.

The full KfW SME Panel can be found at KfW SME Panel | KfW.

The KfW SME Panel (KfW-Mittelstandspanel) has been conducted by KfW Research since 2003 and provides a representative dataset of small and medium-sized enterprises in Germany. It is the only representative survey of the entire German SME sector, from solo entrepreneurs to large SMEs, making it the most important source of data on issues relevant to the SME sector. The basic population of the KfW SME Panel includes all private-sector companies from all industries with annual turnovers of up to EUR 500 million. A total of 13,079 SMEs took part in the most recent wave. The main survey of the 23rd wave of the KfW SME Panel was conducted in the period from 10 February to 20 June 2025. An additional – equally representative – special survey to the KfW SME Panel on the current business situation was carried out at the beginning of September 2025 (with 2,749 responses).

KfW supports SMEs with a number of promotional programmes on behalf of the Federal Government. More information is available at We are strengthening the SME sector (German page).