Economic and Financial Reports Volume 01/2003

Bank survey evidence on "bank lending to SMEs in the European Union"

This paper presents and analyses the results of a survey of credit institutions in the European Union carried out by the European Investment Bank in the summer of 2003. The main objective of the bank survey was to arrive at a better understanding of recent trends in the credit market for small and medium-sized Enterprises (SMEs) and of prospects for SME bank lending in the future. In particular, we collected information about the volume, performance and conditions of bank lending to firms in different size classes. The EIB survey on bank lending is complementary to other surveys such as the European Central Bank’s bank lending survey (ECB 2003a) recently launched for the euro area and banking reviews commissioned by competition authorities (e.g. UK Competition Commission 2002). The distinguishing feature of our survey is that it entirely focuses on bank lending to enterprises, distinguishes between small firms and medium-sized firms, covers the whole European Union, takes a medium-term perspective, and emphasizes credit availability rather than credit pricing.