SME Finance: Recent trends and developments

Small and Medium-sized Enterprises (SMEs) throughout Europe find it more and more difficult to attract finance. Banks are retreating for different reasons, and alternative finance sources are not mature enough yet to fill up the gap left by banks. In the accompanying presentation Ronald Mahieu addresses some recent developments in the Netherlands and Europe.

Image: © Nationale Beeldbank

In September 2013, the Dutch Central Bank (DNB) reported a spectacular drop in bank loans issues to Dutch companies. The recurring survey of the European Central Bank corroborates this finding. In their most recent survey, December 2012, they also reported that for most European countries the profits and turnovers dropped. When asked, SMEs in Europe see access to finance as their second most important problem, only challenged by the problem of finding customers. Also the outlook is grim; most SMEs in Europe expect no apparent improvement in bank loan provisions.

In the Netherlands a number of new financing initiatives for SME finance have emerged. Crowdfunding, matchmaking, credit unions, leasing, and private/angel equity providers are focusing more and more on funding SMEs and their projects. Also supply chain finance (SCF) solutions are attracting more and more supporters, both from the side of the solution providers, and from the side of individual members in a supply chain. Although these initiatives do not make up for the decrease in bank loans, there is considerable hope that they will over the next few years.

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SME Finance: Recent evidence, Mahieu (2013)