UIn view of rising interest rates and the feared recession, companies in Germany are finding it more difficult to obtain new bank loans. 30 percent of those companies that are currently negotiating a loan experienced reluctance from the banks in December. The credit hurdle has never been so high since the survey began in this form in 2017, as the Munich Ifo Institute announced on Thursday in its quarterly survey. In September it was only 24.3 percent. “Banks are gradually increasing lending rates and are more reluctant to grant loans,” said Klaus Wohlrabe, head of the survey department. “The days of low interest rates are over for the time being.” Many companies would have to get used to it and adjust their financing structure.
Banks take a closer look at service providers in particular: 34.6 percent of the companies looking for credit reported that the financial institutions had become more restrictive. Again, gastronomy stands out with 67.7 percent. In industry, the value was around 28 percent. In retail, on the other hand, it was just under 21 percent. “With a view to the economy, we do not expect any major effects,” Wohlrabe told the Reuters news agency. “There is no credit crunch or anything similar to be expected.” However, it will be particularly problematic for companies that are currently in poor financial shape.
“This applies in particular to smaller companies, which have barely survived the last few years economically and are partially dependent on new loans,” said the Ifo expert. “If they don’t get it, that could also mean bankruptcy.” Small businesses and the self-employed continue to be hardest hit. Almost every second service provider in this segment reported problems getting fresh money. “The current economic situation is difficult for some self-employed people,” said Wohlrabe. “For them, the bank loan is still one of the most important financing instruments.” This exacerbates the situation for many self-employed people.
According to economists, the German economy is heading for a recession as it is being hit by the energy crisis, material shortages, rising interest rates and high inflation. However, hopes have recently grown that there will be no sharp slump and that there will only be a mild recession. The Ifo Institute, for example, is only expecting a mini decline in gross domestic product of 0.1 percent this year. The wave of bankruptcies feared in view of the difficult framework conditions has also not materialized so far.