KfW ifo Credit Constraint Indicator October 2020
News from 2020-10-15 / KfW Research
Small and medium-sized enterprises face growing barriers in accessing credit
Banks’ reluctance to give loans to small and medium-sized enterprises continues to grow in the coronavirus crisis. But considering the exceptional economic situation, the criteria are still being tightened with moderation.
The KfW ifo Credit Constraint Indicator for SMEs rose slightly in the third quarter. 21.7% of enterprises reported that banks were being restrictive in loan negotiations. As a result, the gap to large enterprises has widened again slightly. In this size class, credit access improved after criteria were significantly tightened in the previous quarter.
SME service providers encounter particularly adverse conditions for accessing loans. More than one in four currently have difficulties in obtaining loans. At the same time, the situation has eased in other sectors of the economy. Credit constraint decreased across both size classes in the construction and manufacturing sectors.