OREANDA-NEWS. June 5, 2012. Despite the ongoing sovereign debt and currency crisis, the financing conditions for enterprises in Germany have developed positively overall in the past twelve months and can be characterised as stable. To a large degree this is the result of the still relatively strong economy in Germany, which had a positive impact on the financing situation. Primarily smaller enterprises benefitted from this, helping somewhat close the gap between the significantly better financing situations of larger compared to smaller enterprises. However, small and young as well as innovative enterprises with R&D activities continue to experience significant problems in obtaining credit. These are the main results of the 2012 Business Survey that KfW conducted in the first quarter of 2012 among about 3,400 participating enterprises together with the Federation of German Industries (BDI), the Federation of German Wholesale and Foreign Trade (BGA), the German Retail Federation (HDE), the German Confederation of Skilled Crafts (ZDH) and other leading business associations.

More enterprises overall are still facing difficulties in gaining access to credit rather than seeing improvements (24% compared to 7% of enterprises). However, the share of those enterprises complaining of such difficulties has dropped by a good 4 percentage points compared to last year's survey. At the same time, the share of enterprises who report experiencing easier access to credit has declined by 2 percentage points.

According to the Business Survey 2012, it was primarily small enterprises that benefitted from the strong economy and the lending behaviour of banks and savings banks. In fact a long-term comparison shows that small enterprises (< EUR 1 million annual turnover) view current access to credit just as positively as in the boom year 2007, in which the lowest value was reported since the survey was started. Despite these improvements, small enterprises continue to report greater problems in obtaining access to credit compared to large enterprises. 33% of small enterprises with less than EUR 1 million in annual turnover reported difficulties in obtaining credit, which is about twice as often as enterprises with over EUR 50 million annual turnover.

Even young enterprises (not older than 5 years) view their access to credit as considerably more restrained than other enterprises. 38% of them report difficulties in obtaining a loan. And 47% of young enterprises that carry out R&D indicate facing difficulties in obtaining credit. These findings are a clear expression of the structural problems for young, innovative and small enterprises when borrowing.

Dr Ulrich Schroder, Chief Executive Officer of KfW Bankengruppe, said, "The overall positive situation in corporate finance is encouraging. In light of the weakening of the economic dynamics this year, the risks associated with the unresolved sovereign debt crisis and the possible burdens resulting from Basel III, it remains one of KfW's primary tasks to secure investment finance for SMEs, not least for small and young enterprises. Against the background of the overall improved financing conditions for enterprises, we are currently concentrating our support on the faltering energy turnaround. Meeting the associated challenges will demand considerable economic and political efforts. In this regard we consider ourselves called upon to take on responsibility."

The Chairman of the BDI/BDA SME Committee, Arndt G. Kirchhoff, explained: "The success of German enterprises on the world markets is primarily a result of their innovative strength. The SME industry in particular finances research and development using almost three-fourths of own funds. Every measure to strengthen the financial resources of enterprises is potentially a measure to strengthen innovative capacity. Therefore, BDI supports the tax concessions for research stipulated in the coalition treaty. This support is unbureaucratic and in particular accommodates the needs of SMEs. It also is topic-neutral and has a broad impact. Last but not least it is economically viable, as current research proves."