Financing SMEs: real jobs, real growth

​Strengthening banks’ ability to lend will help the EU economy grow. Bank lending represents the core source of financing during the start and expansion of a small and medium sized business.​





>> Learn more: Policy Perspectives 2016-2017





Strengthening banks’ ability to lend will help the EU economy grow. Bank lending represents the core source of financing during the start and expansion of a small and medium sized business.

Enabling small and medium-sized retail banks in Europe – along with SMEs

The European Commission has rightly put growth and jobs at the top of its political agenda. Reaching that goal will hinge on small and medium-sized enterprises. Ideally placed to benefit from this stated goal, SMEs account for 99 per cent of businesses in Europe and employ two-thirds of the private-sector workforce. Savings and retail banks have a special role to play by working with and helping SMEs during all stages of their development – from creation to scale up to maturity.

Savings and retail banks: €500 billion in SME financing

ESBG members provide a half trillion euros in loans to SMEs in Europe, roughly the value of Sweden’s economic gross domestic product. The impact is felt at local and Member State level. For example, the members of the German Savings Banks Association account for 42.6 per cent of the market share amongst SMEs in Germany. In France, ESBG member Groupe BPCE is the top bank for SMEs within the hexagone, with a 38 per cent penetration rate. In Spain, 60 per cent of small and medium-sized enterprises are ESBG member CECA’s customers.

Capital Markets Union and bank lending ​

Since the launch of the Capital Markets Union by the European Commission, focus has been drawn to how best to boost SMEs’ access to capital markets finance to offset the post-crisis drop in bank lending. Retail and savings banks view the role of capital markets differently, however, seeing them as a complement to bank lending – not a substitute. For plenty of good reasons, loans from a local bank is by far the most preferred source of external finance of SMEs. ​Beyond capital markets, risk treatment of SMEs’ exposures, synthetic securitisation and guarantee schemes are important areas to expand the SME financing toolbox. Policy can help by taking into account savings and retail banks’ specific nature, which are vastly less complex and committed to SMEs clients. The U.S. Census Bureau 2012 Survey of Business Owners shows that SMEs have a healthy appetite for debt financing through banks in the United States for business creation and expansion. This mirrors SME demand figures for bank financing in the European Union.​


>> Learn more: Policy Perspectives 2016-2017



SME finance; Capital Markets; Capital Markets Union; Securities