Small and medium-sized companies in Greece have the highest need for bank funding in the eurozone, but find it hard to get, a survey by the European Central Bank and the European Commission showed on Wednesday.
The survey highlighted the eurozone’s economic divide whereby companies in the crisis-stricken periphery are having to pay more for loans than their peers in the core – a sign that the ECB’s ultra loose monetary policy is not reaching all countries evenly.
Small and medium-sized companies (SMEs) form the backbone of the eurozone economy and rely mainly on bank funding rather than capital markets, so access to loans is crucial to the region’s economic recovery.
The survey, conducted every six months, showed that SMEs in Greece reported the biggest increase in demand for bank loans in April-September, while SMEs in Ireland, the Netherlands, Austria and Portugal reported, on balance, a decline in their need for bank loans.
At the same time, SMEs in Greece reported the most obstacles to securing financing, while companies in Finland, Austria and Belgium reported the lowest.
In Greece, the net percentage of SMEs that said it had become easier to obtain bank loans rose to -21 percent from -40 percent in the previous survey, but the number was still negative and the ECB said “the level of the net percentage continues to signal the presence of significant difficulties in accessing bank credit”.
Looking ahead, eurozone SMEs expected on balance neither an improvement or a deterioration in the availability of bank loans in the six months through March next year.
In Spain, SMEs said the outlook for access to finance had improved significantly since the previous survey, which covered October 2013 to March 2014, and had also improved in Germany. SMEs in France and Italy, however, said the outlook for funding had become more difficult.
The survey of 10,750 companies was conducted between Sept. 1 and Oct. 10. [Reuters]