Cost of loans to business keeps rising
The high risk involved in lending to Greek enterprises, due to their small size, and the increased uncertainty in the economy are the main reasons lending rates remain high in Greece.
According to figures released by the Bank of Greece on Thursday, the interest rates that Greek businesses borrow at posted an increase in the last three months, despite the state guaranteeing a significant share of the loans that banks issued in 2020 due to Covid-linked problems.
Therefore the average floating rate for loans to small and medium-sized enterprises – i.e. up to 250,000 euros – rose to 5.99% in November from 5.53% in October and 4.55% in September, while the average rate for business loans up to €1 million grew to 3.59% in November from 3.47% in October and 3.11% in September.
The growth trend observed in Greek lending rates, even through the cost of money is in negative territory, has widened the gap with the average European rates.