Banks Slightly Less Reluctant to Lend to Companies in Germany

It has become slightly easier for German companies to obtain new loans. In December, 25.6% of companies in ongoing credit negotiations reported restraint on the part of banks; in September, that figure was 29.2%. “However, the banks remain cautious when it comes to lending,” says Klaus Wohlrabe, Head of Surveys at ifo.

“Banks’ lending practices also reflect high key interest rates and uncertainty among companies with regard to economic development,” he adds. The decline in the ifo Credit Constraint Indicator was mainly attributable to service providers (from 31.5% to 25.7%) and construction (from 29.4% to 19.9%). In manufacturing, the indicator fell by just under two percentage points to 25.6%.

In retail, the share remained unchanged at 28.2%. For many retailers, the economic situation remains difficult due to customers’ reluctance to spend. This is also reflected in the lending conditions. In wholesale, the figure rose from 20.2% to 26.9%.

It is generally easier for larger companies to obtain loans. For the self-employed and microenterprises, the Credit Constraint Indicator is at 45.7%.