Concerns about ‘zombie companies’ in the SME sector are unfounded

Warnings are issued from time to time about a possible 'zombification' of Germany's corporate landscape. But such concerns are unfounded for the country’s SMEs, as analyses based on the KfW SME Panel now demonstrate for the first time. The study shows that a critical debt sustainability ratio can be demonstrated for only around 5 % of SMEs, whose profits are insufficient for them to meet their interest obligations. This modest number of presumed zombie companies has remained nearly unchanged even after the start of the low interest-rate policy. The investment and productivity levels of these enterprises remain in a normal range despite low profitability. This is a strong indication of an SME sector that is generally structurally sound.

Concerns about ‘zombie companies’ in the SME sector are unfounded(PDF, 76 KB, accessible)

Press release