Companies Face More Difficulties Obtaining Credit in Germany

It is becoming more difficult for companies in Germany to obtain new loans. Currently, 24.3 percent 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. “The difficult economic climate is currently making banks more cautious,” says Klaus Wohlrabe, Head of Surveys at ifo.

“Without new loans, some companies might struggle for economic survival,” Wohlrabe says.

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