Abstract
Access to finance is widely perceived to be a crucial factor for firms – especially SMEs – to maintain their day-to-day business as well as to achieve long term growth and investment goals. Hence, experiencing major financing obstacles can be a considerable challenge for enterprises, which in turn can increase credit risks in the corporate sector and also negatively affect productivity in the economy. This seems to be of even more relevance today when, during the current financial crisis, sources of firm financing have become scarcer and the availability of financing instruments has deteriorated.
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Notes
- 1.
See for a review, ECB (2007).
- 2.
For more information regarding the survey as well as the reports on the individual waves see http://www.ecb.europa.eu/stats/money/surveys/sme/html/index.en.html. See also ECB (2011).
- 3.
Each respondent is given a choice of seven alternatives: finding customers, competition, access to finance, costs of production (including labour costs), availability of skilled staff, regulation and other reasons.
- 4.
It is important to note that in SAFE we do not observe the actual levels of financing obstacles within a firm as well as whether access to finance is the second most pressing problem or the third most pressing, etc. (firms cannot signal more than one problem). In this way it could be that the survey underestimates the existence of firms that consider access to finance as a pressing (although not the most pressing) problem.
- 5.
In this last round, French firms appear to have suffered a setback in accessing bank loans, especially compared with previous surveys. This development might be accounted for by the domestic debate taking place at the time of the interviews regarding the continuation of public guarantees and policy measures aimed at facilitating access to credit implemented during the crisis.
- 6.
For more information on the bank lending survey and regularly published reports see http://www.ecb.europa.eu/stats/money/surveys/lend/html/index.en.html.
- 7.
See BIS (2010).
- 8.
This section is based on the analysis carried out in Ferrando and Griesshaber (2010).
- 9.
Additionally, Ferrando and Griesshaber (2010) split the sample according to country and repeat the probit analysis including all major structural variables to investigate potential differences in the determinants of financing obstacles across countries. The results show that firm age again is a robust predictor except in the case of Italy. The same appears to hold for ownership with exception of France. Similar to the results from the aggregated sample, size is not statistically significant except in the case of Spanish small and medium firms which, according to the estimates, are suffering relatively more than micro firms from the access to finance as a pressing problem as well as in the case of small French firms for which the coefficient is negative. Tuning to the remaining covariates in the models, whereas almost no significant sectoral effects were found at the euro area level, things are slightly different when considering the major countries individually. In the case of Spanish firms, those active in construction sector are significantly more likely to experience financing obstacles than firms in the service sector. In France, a similar effect is found for manufacturing firms.
References
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Beck T, Demirgüç-Kunt A, Laeven L, Maksimovic V (2006) The determinants of financing obstacles. J Int Money Finance 25:932–952
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European Central Bank (2011) Financing obstacles faced by euro area small and medium-sized enterprises during the financial crisis. Financial stability review, June
Ferrando A, Griesshaber N (2010) Financing obstacles among euro area firms: who suffers the most? ECB working paper series, No. 1293
Acknowledgments
This chapter has benefited from discussions and comments from I. Ganoulis, D. Rodriguez Palenzuela as well as from participants at the Conference “The Economics of Small Businesses in the aftermath of the crisis. Cross-country Analyses and Policies” (University of Urbino). The views expressed are those of the author and should not be attributed to the European Central Bank.
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Ferrando, A. (2012). Access to Finance in the Euro Area: What Are SMEs Telling Us About the Crisis?. In: Calcagnini, G., Favaretto, I. (eds) Small Businesses in the Aftermath of the Crisis. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2852-8_9
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