• More SMEs perceive banks as being restrictive in their lending than ever before
• Retailers report that constraints have become significantly more pronounced
• Demand for finance is falling

Access to credit has worsened further for SMEs in Germany. In the second quarter of 2026, 40.5 per cent of SMEs that wanted to apply for loans reported that their banks had adopted restrictive lending practices. That was an increase of 6.5 percentage points on the previous quarter, marking a new record high since surveys were first recorded in 2017. Every quarter, KfW analyses the data collected in the economic surveys of the ifo Institute by size classes and economic sectors for the KfW ifo Credit Constraint Indicator.

Among large enterprises that conducted loan negotiations in the preceding three months, 32.9 per cent deplored that banks were applying strict criteria. That was 3.8 percentage points more than in the previous quarter. Among large enterprises, it was the second-highest share ever documented since data were first recorded.

“More and more enterprises feel that banks are applying restrictive lending standards. The weak economy is affecting companies' balance sheets. Equity ratios and ratings have deteriorated lately. Banks are responding to this with higher risk premiums and tougher financing conditions,” said Dr Dirk Schumacher, Chief Economist of KfW.

Retailers experienced a particularly sharp increase in credit constraints. More than half of enterprises in both size classes faced restrictions in accessing loans. Constraints have reached new record highs in this sector. “This development is likely the result of inflation-induced consumer sluggishness, which is currently weighing on retailers in particular,” said Dr Dirk Schumacher.

A historically high share of 40.8 per cent of manufacturers and 42.4 per cent of service providers in the SME sector also complained about constraints in accessing loans.

At the same time, however, businesses’ credit demand also fell noticeably in the second quarter. The proportion of small and medium-sized enterprises that were in negotiations on finance with banks fell by 1.7 percentage points to 19.3 per cent. Thus, appetite for credit dropped to the lowest level since the fourth quarter of 2023, when tight monetary policy dampened SMEs’ demand for finance.

Large enterprises, too, showed a below-average appetite for loans again. Only 27.5 per cent of them had a discussion about credit with their bank in the preceding three months, a drop of 1.1 percentage points on the previous quarter. “The drop in credit demand is likely due primarily to the fact that the Iran war with its impact on energy prices and supply chains has put a big dampener on sentiment among German enterprises,” said Dr Dirk Schumacher.

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).