KfW Research: Credit constraint at record level for SMEs

• Small and medium-sized enterprises face increasing challenges in accessing credit
• SMEs’ appetite for loans remains low

Enterprises with financing requirements face growing challenges accessing credit. In the fourth quarter of 2025, 37.8 per cent of small and medium-sized enterprises (SMEs) reported tighter lending conditions – an increase of 3.9 percentage points on the previous quarter and a new all-time high. Among large enterprises, that share was below the previous peak, at 29.4 per cent, but increased by a noticeable nine percentage points on the previous quarter.

SMEs have reported tighter-than-average conditions from banks in loan negotiations for the past three years.

“In light of the wide range of economic challenges, banks appear to be anticipating that businesses’ fundamentals will deteriorate and are therefore taking a cautious approach,”

said Dr Dirk Schumacher, Chief Economist of KfW.

These are the findings of the KfW ifo Credit Constraint Indicator. Every quarter, KfW analyses the data collected in the economic surveys of the ifo Institute by size classes and economic sectors.

Credit constraints reached new all-time highs across all sectors. Among SMEs, retailers (45.2 per cent) and service providers (41.4 per cent) were particularly affected. Among large enterprises, record levels were recorded for retailers (49.7 per cent) and wholesalers (41.7 per cent).

Businesses also continue to have little appetite for loans. Only around one in five SMEs were in loan negotiations in the fourth quarter, much fewer than the long-term average. Among large enterprises, on the other hand, that share grew significantly by 4.3 percentage points to 31.5 per cent, which was close to the long-term average.

“In the absence of an economic rebound, businesses have little interest in borrowing. The downturn in interest rates is having only a limited effect. At the same time, cyclical and structural challenges are making it more difficult for businesses to obtain credit at all. In order to reverse this trend, a positive economic development in 2026 is indispensable,”

said Dr Dirk Schumacher, Chief Economist of KfW.

The current edition of the KfW ifo Credit Constraint Indicator is available at: KfW ifo Credit Constraint Indicator

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).