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BELGIUM: SMEs have difficulty in getting access to finance

posted onAugust 1, 2017

Belgians continue to save especially in the big banks, corporations continue to get credit but for SMEs access to finance remains complicated. According to figures released  by L’Echo | De Tijd, the only business newspapers in Belgium, total savings deposits rose by 1.22% during the first six months of 2017. BNP Paribas Fortis, KBC and Belfius reported increases of 1.24%, 1.1% and 0.8%, respectively.

Belgian banks lent € 142.1 billion to businesses in the first quarter of the year, according to the Belgian Financial Sector Federation (Febelfin).

"This historic record is proof that banks continue to give credit to entrepreneurs who are able to present a well-prepared credit file", Febelfin said.

But SMEs have difficulty in getting access to bank credit  according to the Union of the Middle Classes (UCM), the Belgian organization for the self-employed and SMEs. For two-thirds (66.8%) of the 505 entrepreneurs interviewed in a survey conducted by UCM in May, estimate that the situation has deteriorated compared to five years ago. However, the perception is less negative than in the 2015 survey. The rate of credit refusal decreased very slightly (23.9% to 23.6%)

In addition, there is a real dissatisfaction with the guarantees requested by the banks. They are considered disproportionate by more than two-thirds of entrepreneurs (68.7%) according to the same source. Despite the difficulty of access to credit Belgian SMEs continue to invest in their activity: 80% of the respondents reported using at least partial self-financing. Entrepreneurs, particularly in the start-up phase, clearly expressed the need for more financial support.

On the contrary, local authorities invested less in 2016, according to a Belfius Bank and Insurance annual study. Investments by local authorities reached 3.1 billion euros, down almost 30% from the 4 billion invested in 2012. This historically low level of local investment further aggravates the level of under-investment of the entire public sector in Belgium which remains historically below the European average (2.3% of GDP compared to an average of about 3% in the EU).



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