24.3% German companies report obstacles seeking bank credit: ifo

26 Oct '22

1 min read

Pic: Shutterstock/ lunopark

It is becoming more difficult for companies in Germany to obtain new loans. Currently, 24.3 per cent of companies in ongoing credit negotiations report restraint on the part of banks – the highest proportion since 2017. This is a finding of surveys by the ifo Institute, an economic thinktank.

“The difficult economic climate is currently making banks more cautious,” Klaus Wohlrabe, head of surveys at ifo, said in a press release. “Without new loans, some companies might struggle for economic survival.”

Among service providers, as many as 28.8 per cent of companies seeking credit say that banks are reluctant to lend. In manufacturing, around 8.4 per cent of companies seeking credit in the chemical industry and 22.5 per cent of those seeking credit in the automotive industry reported difficulties. In trade, however, the figure was just under 15 per cent of these companies.

Nevertheless, it is microenterprises and the solo self-employed that are most affected. Here, around one in two companies seeking credit reported that it is hard to obtain loans. “For microenterprises, other forms of financing such as bonds are more difficult or impossible to use. They often depend on bank loans,” said Wohlrabe.

Fibre2Fashion News Desk (NB)

More Textiles News - Germany...