Financing SMEs and Entrepreneurs 2018

Chapter 3. Country snapshots

Abstract

This chapter contains a snapshot view of SME and entrepreneurship finance developments, as well as the scoreboard with core indicators for countries covered in this report. A more comprehensive discussion is provided in the full country profiles published online.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Australia

Small and medium sized enterprises (SMEs) account for 99.8% of all enterprises in Australia, according to the Australian Bureau of Statistics (ABS). In 2015-16, there were 2 167 732 SMEs in Australia.

The Australian economy has completed its 26th consecutive year of economic growth, and is expected to grow at a solid pace as the drag on growth from falling mining investment nears completion. Real GDP growth in 2016-17 was 2.0%.

Business borrowing rates are historically low for both SMEs and large businesses. SME interest rates in Australia have gradually declined from 8.6% in 2007 to 5.3% in 2016. The interest rate spread more than doubled from 96 basis points (2007) to 183 basis points in 2008, and remained higher afterwards.

New lending to SMEs in 2016 declined 4.9% after a period of growth; having risen by 7.4% (2013), 7.8% (2014) and 6.7% (2015). Total outstanding SME loans increased by 4.2% in 2015 and 3.9% in 2016. Over the recent years the share of SME lending to total business lending declined gradually, to 30.7% in 2016.

Total valuations of all investments by Venture Capital and Later Stage Private Equity (VC&LSPE) investment vehicles rose 4.7% to AUD 9 213 million in 2016, from AUD 8 802 million reported in 2015. Leasing and hire purchase volumes dropped from AUD 9 546 million in 2007 to a low of 6 904 million in 2009. Leasing and hire purchase volumes have recovered since, rising to AUD 9 474 million in 2016.

The number of bankruptcies per 10 000 has reached a new low in the last ten years, declining to 36. Non-performing loans as a percentage of total outstanding business loans have declined to 1.1% in 2016.

The Australian Government has a comprehensive SME agenda aimed at promoting growth, employment and opportunities across the economy. Its policies for promoting SMEs focus on reducing red tape, improving the operating environment for businesses, increasing incentives for investment, and enhancing rewards and opportunities for private endeavour. Policies aiming to increase long-term opportunities for SMEs include innovative finance and crowd-sourced equity funding; competition and consumer policies; taxation and business incentives; export financing; and small business assistance.

Table 3.1. Scoreboard for Australia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	AUD million	188 709	203 880	203 598	223 624	234 271	238 267	241 220	249 855	260 282	270 408
Outstanding business loans, total	AUD million	710 887	771 942	721 345	705 885	714 619	737 796	749 726	784 781	835 077	881 298
Share of SME outstanding loans	% of total outst. business loans	26.55	26.41	28.22	31.68	32.78	32.29	32.17	31.84	31.17	30.68
New business lending, total	AUD million	374 997	336 145	265 484	265 820	310 696	273 774	292 430	360 436	391 641	341 766
New business lending, SMEs	AUD million	77 517	79 914	69 562	82 506	81 561	73 674	79 130	85 373	91 126	86 658
Share of new SME lending	% of total new lending	20.67	23.77	26.20	31.04	26.25	26.91	27.06	23.69	23.27	25.36
Non-performing loans, total	% of all business loans	0.5	2.07	3.27	3.55	3.16	2.68	2.03	1.39	1.01	1.13
Interest rate, SMEs	%	8.56	7.99	7.56	8.29	7.94	7.07	6.44	6.18	5.58	5.29
Interest rate, large firms	%	7.6	6.16	5.85	6.67	6.37	5.29	4.29	4.15	3.59	3.2
Interest rate spread	% points	0.96	1.83	1.71	1.62	1.57	1.78	2.15	2.03	1.99	2.09
Non-bank finance
Venture and growth capital	AUD million	6 939	8 315	7 903	8 912	8 700	7 652	8 348	7 907	8 802	9 213
Venture and growth capital	%, Year-on-year growth rate		19.83	-4.95	12.77	-2.38	-12.05	9.10	-5.28	11.32	4.67
Leasing and hire purchases	AUD million	9 546	9 342	6 904	7 140	7 579	8 691	7 549	8 690	10 368	9 474
Factoring and invoice discounting	AUD million	54 757	64 991	63 101	58 661	61 422	63 361	63 272	62 391	64 400	..
Other indicators
Bankruptcies, Unincorporated	Number	5 045	4 427	4 426	5 616	5 266	5 858	4 761	4 007	4 088	4 350
Bankruptcies, Unincorporated	Per 10 000 enterprises	42	36	36	45	43	50	42	35	34	36
Bankruptcies, Corporates	Number	7 489	9 067	9 465	9 605	10 439	10 583	10 854	8 822	10 093	8 511
Bankruptcies, Corporates	Per 10 000 companies	48	55	56	54	57	55	54	41	45	36
Bankruptcies, Total	Per 10 000 businesses	45	47	47	50	51	53	49	39	41	36
Invoice payment days, average	Number of days	53	56	54	53	54	53	54	53	47	..
Outstanding business credit, Unincorporated business	AUD million	111 156	117 386	118 676	121 905	124 813	131 234	136 395	141 887	149 552	156 812
Outstanding business credit, Private tr. corp.	AUD million	498 098	553 148	512 493	498 342	512 711	522 074	529 004	554 573	590 402	624 743

Source: See Table 1.4 of full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-13-en

Austria

In 2015, SMEs made up 99.7% of all firms and employed 67.5% of the labour force.

New lending has been in continuous decline since 2009, except for a slight bump in 2011. This downward pattern continued in 2016, with new lending to SMEs falling by 7.6%. This development is dominated by a decline in short term loans (less than 6 months). These loans are typically of very short maturity and are regularly rolled over. Due to multiple counting of these loans, their development has an over-proportionate effect on new loans statistics. Whereas short term loans decreased by 50% from 2009 to 2016, long term loans increased by 11.1% over the same period.

The weak dynamics of bank lending in the corporate sector are due to both demand and supply side factors. However, for the first time since 2007, demand for bank loans reveals a clear positive trend.

Interest rates for SMEs decreased for the fifth year in a row, further improving on a historical low of 2.0% in 2015 to reach 1.9% in 2016. Interest rates for large firms as well as the interest rate spread declined in 2016.

As in many countries, venture and growth capital investments in Austria are very volatile. One major investment can make a big difference in the data. Total venture and growth capital slumped in 2012 to less than EUR 70 million, after a peak of EUR 208 million in 2011. At EUR 76.2 million in 2016, this figure more than halved compared to the previous year.

Crowdfunding as an alternative source of financing is gaining importance. In 2016, Austrian crowdfunding platforms collected EUR 22.8 million compared to EUR 8.7 million in 2015.

In 2016, bankruptcies per 1 000 firms stood at their lowest level since 2009 amounting to only 10 per 1 000 firms compared to 18 in 2009. Rejected loan applications had been decreasing from 10.2% in 2009 to 0.4% in 2012. However, in 2016, this indicator stood at 2.5%, down from 5.5% in the previous year. The ratio of non-performing loans (NPLs) decreased markedly from 4.2% in 2015 to 3.1% in 2016.

Business-to-business (B2B) payment delays have not recovered to their 2007 level of 8 days, and have ranged from 11 to 13 days in 2009-14. Business-to-customer (B2C) payment delays have more than halved in the reference period, falling from 20 days in 2007 to 9 days in 2014.

In July 2016, the Austrian Government launched a comprehensive start-up programme with a total volume of about EUR 185 million within three years. This “Start-up Package” aims at fostering access to finance, realising the potential of high-growth firms and reducing barriers to improve the start-up ecosystem in Austria.

Table 3.2. Scoreboard for Austria

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, total	EUR million	123 067	134 897	132 413	135 465	138 840	140 384	140 329	136 606	137 203	136 829
New business lending, total	EUR million	..	..	85 490	74 896	73 041	80 867	73 460	73 126	61 711	55 543
New business lending, SMEs	EUR million	..	..	10 054	9 414	9 476	9 347	8 884	8 237	8 116	7 499
Share of new SME lending	% of total new lending	..	..	11.76	12.57	12.97	11.56	12.09	11.26	13.15	13.50
Short-term loans, SMEs	EUR million	..	..	6 014	5 139	4 944	4 901	4 536	4 016	3 345	3 010
Long-term loans, SMEs	EUR million	..	..	4 040	4 275	4 532	4 446	4 348	4 221	4 771	4 489
Share of short-term SME lending	% of total SME lending	..	..	59.82	54.59	52.17	52.43	51.06	48.76	41.21	40.14
Government loan guarantees, SMEs	EUR million	341	164	214	173	143	158	167	172	204	192
Government guaranteed loans, SMEs	EUR million	429	211	279	226	185	207	211	225	258	282
Direct government loans, SMEs	EUR million	535	579	574	607	633	539	594	490	543	583
Non-performing loans, total	% of all business loans	..	..	..	..	..	..	..	4.1	4.2	3.1
Interest rate, SMEs (loans up to EUR 1 million)	%	5.11	5.47	2.89	2.43	2.92	2.46	2.28	2.27	2.02	1.92
Interest rate, large firms (loans over EUR 1 million)	%	4.69	5.04	2.33	1.96	2.55	1.98	1.77	1.74	1.61	1.54
Interest rate spread	% points	0.42	0.43	0.56	0.47	0.37	0.48	0.51	0.53	0.41	0.38
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	26.33	27.53	25.50	28.32	27.64	25.70	28.66	21.23
Rejection rate	1-(SME loans authorised/ req.)	..	..	10.24	2.60	0.78	0.41	2.67	6.02	5.52	2.49
Non-bank finance
Venture and growth capital (seed, start-up, later stage)	EUR million	60.9	57.4	73.5	43.3	97	38.6	57.1	59.7	108.9	50.5
Venture and growth capital (growth capital)	EUR million	22.9	15.7	39.6	31.9	111.6	26	25	45.2	77.8	25.7
Venture and growth capital (total)	EUR million	83.8	73.1	113.1	75.2	208.6	64.6	82.1	104.9	186.7	76.2
Venture and growth capital (growth rate)	%, Year-on-year growth rate	..	-12.8	54.7	-33.5	177.4	-69.0	27.1	27.8	78.0	-59.2
Other indicators
Payment delays, B2B	Number of days	..	8	8	11	12	11	12	13	..	..
Payment delays, B2C	Number of days	20	16	6	11	11	9	9	9	..	..
Bankruptcies, total	Number	6 295	6 315	6 902	6 376	5 869	6 041	5 459	5 423	5 150	5 226

Source: See Table 2.1 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-14-en

Belgium

In 2015, SMEs dominated the business enterprise landscape in Belgium, comprising 99.9% of all firms.

The outstanding stock of SME loans expanded moderately by 1.7% in 2016, 2 percentage points down from its growth rate in the previous year.

SME interest rates continued their downward path, and stood at 1.7% in 2016. The interest rate spread between loans charged to large enterprises and to SMEs amount to 25 basis points in 2016.

Survey data illustrates that lending conditions eased between 2013 and the end of 2015 and have been relatively stable since.

Leasing volumes increased in 2016 by more than a quarter of their 2015 volumes, which is the highest growth rate posted in the period. In contrast, factoring volumes posted the lowest growth rate of the period at 2.7%.

Factoring continues to be overall more widely used by Belgian SMEs. After a strong period of expansion, with rates of more than 10% every year between 2012 and 2015, factoring grew at a slower pace in 2016. While factoring volumes accounted for 6.3% of GDP in 2008, this percentage increased to almost 15% in 2016.

Venture capital investments continue to show considerable variation due to the small number of deals conducted every year. Total venture capital investments increased by more than 60.0% in 2016 after a contraction of 10.8% in 2015.

Both payment delays and bankruptcy rates were down in 2016 compared to 2015 and were the lowest figures since 2008.

Policy initiatives to ease SMEs’ access to finance are taken at the federal and regional level.

In 2016, the Flemish region made some small adjustments to instruments of PMV. The Startlening + is now also available for student-entrepreneurs. PMV also adapted the application of winwin-lening to make cooperation with crowdfunding platforms possible. Crowdfunding platforms who collaborate with PMV can offer winwin-lening as a service to crowd funders.

In the aftermath of the "lockdown" of 2015 as a result of terrorist attacks in Paris and the terror attacks of March 2016 in Brussels, the government of the Brussels-Capital Region has taken an array of measures to support the sectors worst-affected economically. In this context, crisis loans as well as specific assistance have been implemented to support companies facing difficulties.

The aim of this measure is to ensure the continuity of Brussels’ enterprises which were hit by a fall in turnover in the aftermath of the above mentioned events, by granting them crisis loans of up to EUR 250 000 guaranteed by the Brussels guarantee fund.

Table 3.3. Scoreboard for Belgium

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	82 833	89 066	88 925	93 900	100 031	109 646	109 487	100 743	104 422	106 219
Outstanding business loans, total	EUR million	134 211	149 389	141 761	150 610	153 739	167 571	161 973	151 734	164 596	160 948
Share of SME outstanding loans	% of total outst. business loans	61.72	59.62	62.73	62.35	65.07	65.43	67.60	66.39	63.44	66.00
Outstanding short-term loans, total	EUR million	37 394	40 355	34 120	35 414	36 476	34 484	33 829	31 275	30 801	31 995
Outstanding long-term loans, total	EUR million	59 676	66 092	72 233	77 194	79 329	82 484	83 893	80 330	84 764	90 836
Share of short-term lending, total	% of total business lending	38.52	37.91	32.08	31.45	31.50	29.48	28.74	28.02	26.65	26.05
Government loan guarantees, SMEs	EUR million	..	156.54	411.94	553.94	317.51	266.01	480.21	265.60	448.23	398.34
Governm.guaranteed loans, SMEs	EUR million	..	312.67	832.70	888.38	561.74	484.34	826.07	476.75	805.59	735.91
Direct government loans, SMEs	EUR million	..	113.71	142.20	141.87	148.29	170.54	235.62	..	..	..
Interest rate, SMEs	%	5.45	5.70	3.01	2.51	2.88	2.32	2.06	2.09	1.83	1.73
Interest rate, large firms	%	4.72	5.05	2.09	1.70	2.22	1.74	1.76	1.77	1.60	1.48
Interest rate spread	% points	0.73	0.65	0.92	0.81	0.66	0.58	0.30	0.32	0.23	0.25
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	74.30	71.90	78.60	..	..	..	..
Percentage of SME loan applications	SME loan appli./ total # of SMEs	..	..	22.22	26.46	30.20	29.33	29.36	39.33	36.61	36.71
Rejection rate	1-(SME loans auth./ requested)	..	..	0.52	5.13	6.44	10.40	10.91	5.88	5.71	6.13
Utilisation rate	SME loans used/ authorised	77.80	79.05	80.69	80.07	80.16	77.45	77.79	79.76	79.62	80.11
Non-bank finance
Venture and growth capital	EUR million	395.23	355.54	448.52	243.18	224.40	351.63	285.13	401.62	358.27	573.24
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-10.04	26.15	-45.78	-7.72	56.70	-18.91	40.86	-10.79	60.00
Leasing and hire purchases	EUR million	4 405.9	4 856.4	3 756.4	4 005.5	4 439.0	4 450.2	4 121.7	4 356.9	4 800.5	6 009.6
Factoring and invoice discounting	EUR million	19.20	22.50	23.92	32.20	36.87	42.35	47.68	55.37	61.17	62.85
Other indicators
Payment delays, B2B	Number of days	..	..	17	17	15	19	18	19	13	10
Bankruptcies, total	Number	7 680	8 476	9 420	9 570	10 224	10 587	11 740	10 736	9 762	9 170
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	10.36	11.14	1.59	6.83	3.55	10.89	-8.55	-9.07	-6.06

Source: See Table 3.6 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-15-en

Brazil

Micro and small-sized enterprises (MSEs) form an essential part of the Brazilian economy, accounting for 98.5% of all legally constituted companies (11.5 million). In all, they are responsible for 27% of GDP, and 41% of the total payroll.

There are different definitions of MSMEs in Brazil, which can be classified by turnover, number of employees, or even by exported value.

After years of strong growth, Brazil experienced an economic recession, which began in mid-2014. GDP growth amounted to 0.5% in 2014, declining 3.8% in 2015 and further shrinking 3.6% in 2016. It is believed that GDP will grow 0.5% in 2017, thus ending the most severe recession since 1947.

The overnight reference interest rate of Banco Central do Brasil (Special Clearance and Escrow System - SELIC) has been in a process of gradual decline, from 14.25% per annum in December 2015, to 13.75% in December 2016, and 9.25% in August 2017.

Monetary policy to curtail inflation led to high interest rates of 14.8% for large corporate borrowers and to 30.6% for SMEs. These high and rising rates have created a lending climate with shrinking demand for new SME loans. Interest rates have increased more for micro-enterprises and SMEs than for large businesses. At the end of 2016, however, a reduction of the basic interest rate, as well as the first decline in the interest rates for SMEs since approximately two years was observed.

The stock of SME loans fell in 2015 and new lending to SMEs declined in 2014 and 2015. Both observations are in contrast with lending to large businesses, where the outstanding stock of loans, as well as new lending was up in 2014 and 2015. Since 2008, large companies have been receiving a larger share of the business loans granted compared to SMEs. The government has taken on a more active role in this area, often with the aim to provide financial services to small businesses underserved by formal financial institutions. Notable developments include a micro-credit programme, a quota to use 2% of demand deposits of the National Financial System to finance loans to low-income individuals and micro entrepreneurs and a strong increase in the number of service points where financial services are provided.

The regulatory framework for angel investors has been revised in 2016 and further adjusted in 2017, removing some long-standing barriers for investors in SME markets, most notably by offering more legal protection in the case of company closures. New regulation concerning investment-based crowdfunding were introduced in 2017.

SEMPE, the Special Secretariat for Micro and Small Enterprises (SEMPE/MDIC) is the main body of the Brazilian government responsible for formulating, coordinating, articulating and defining public policy guidelines aimed at strengthening, expanding and formalising artisans, individual entrepreneurs and micro and small enterprises. In addition, SEMPE/MDIC leads the articulation of actions aimed at improving the business environment and at contributing to the expansion and sustainability of micro and small enterprises, with the consequent employment and income generation.

Table 3.4. Scoreboard for Brazil

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Outstanding business loans, SMEs	BRL billion	281.13	347.21	388.58	476.96	564.12	629.56	681.31	692.26	656.25	576.9
Outstanding business loans, total	BRL billion	507	690	781	939	1 114	1 289	1 460	1 623	1 7340	1 563
Share of SME outstanding loans	% of total outstanding business loans	55.49	50.35	49.76	50.97	50.64	48.93	46.66	42.65	37.84	36.91
New business lending, total	BRL billion	..	..		..	..	917.83	948.01	992.11	1 027	817.48
New business lending, SMEs	BRL billion	..	..		..	..	566.88	562.21	532.2	490.9	408.98
Share of new SME lending	% of total business lending	..	..		..	..	61.76	59.3	53.64	47.79	50.03
Outstanding short-term loans, SMEs	BRL billion	105.57	109.37	104.07	119.57	150.72	158.58	161.9	155.96	141.47	122.28
Outstanding long-term loans, SMEs	BRL billion	160.04	200.91	240.04	309.64	386.91	469.35	518.06	534.8	513.04	454.62
Share of short-term SME lending	%	39.75	35.25	30.24	27.86	28.03	25.25	23.81	22.58	21.61	21.20
Direct government loans, SMEs	% points	9.87	11.5	13.51	14.08	16.71	18.27	21.26	23.15	26.3	29.06
Non-performing loans, total	% of all business loans	1.51	1.53	2.65	1.82	2.01	2.21	1.84	1.88	2.39	3.15
Non-performing loans, SMEs	% of SME loans	2.64	2.79	4.68	3.39	3.63	4.18	3.56	3.9	5.43	6.66
Interest rate, SMEs	%	..	..	..	..	..	20.5	24.1	26	37.1	33.5
Interest rate, large firms	%	..	..	..	..	..	12.3	14.9	15	17.4	20.8
Interest rate spread	% points	..	..	..	..	..	8.2	9.2	11	19.7	12.7

Source: See Table 4.2 of the full profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-16-en

Canada

In 2016, Canadian small businesses (1-99 employees) constituted 98.0% of all businesses and employed 8.3 million individuals, representing 70.1% of the private sector labour force.

Data from the supply-side survey shows that debt outstanding to all businesses increased by 7.8% in 2016, to CAD 772 billion, while lending to small businesses increased by 3.1%, to CAD 99.1 billion. Small businesses’ share of total outstanding business loans decreased by 0.6 percentage point, to 12.8% in 2016 - its lowest level since 2000.

Indicators show that small business credit conditions have remained relatively stable since 2011. The average interest rate charged to small businesses in 2016 is at the same level as in 2011, 5.3%. The average business prime rate, which remained at 3.0% during the period 2011-14, slightly decreased to 2.8% in 2015 and 2.7% in 2016. The business risk premium is back to its 2013 level of 2.6% in 2016. This reflects stable access to financing for small businesses in Canada.

The small business 90-day loan delinquency rate has returned to pre-recession levels. At the end of 2016, the 90-day loan delinquency rate reached 0.48%, lower than the level of 0.66% observed at the beginning of 2007.

Equity financing (provided in the form of venture capital) increased by 40.6% in 2016, to reach CAD 3.2 billion. Between 2015 and 2016, later stage capital increased by 63.5% to reach CAD 1.46 billion and early stage capital grew by 28.6% to reach CAD 1.6 billion.

In 2016-17, the government of Canada continued to provide measures in support of small and medium-sized enterprises. The government of Canada committed to take actions to support innovative and growth-oriented businesses in reaching their potential, and to help firms put innovation at the core of their business strategy. As announced in its 2017 budget, the government of Canada is making available up to CAD 950 million over five years, starting in 2017-18, to support innovation networks and clusters.

The government of Canada also committed to make available through the Business Development Bank of Canada (BDC) CAD 400 million over three years, starting in 2017-18, for a new Venture Capital Catalyst Initiative (VCCI) that will increase late-stage venture capital available to Canadian entrepreneurs. The government of Canada also reaffirmed its commitment to the vision and mandate of the Accelerated Growth Service (AGS), an initiative launched in 2016-17 to provide coordinated support for businesses across various federal departments and agencies.

Supporting women entrepreneurs has continued to be one of the key focus areas for the government of Canada. On 9 November 2016, BDC announced an investment of CAD 50 million into women-led technology firms as part of its ongoing efforts to support women entrepreneurs. BDC also announced the first closing of StandUp Ventures Fund I on 8 May 2017. This fund invests in Canadian pre-seed and seed-stage high growth, capital-efficient ventures in health, IT and Cleantech with at least one female founder in a senior executive role, such as a Chief Executive Officer.

Table 3.5. Scoreboard for Canada

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	CAD million	83 422	83 363	86 428	85 676	89 090	87 155	91 135	94 008	96 136	99 090
Outstanding business loans, total	CAD million	479 793	533 951	482 290	489 480	503 161	548 025	592 561	642 855	716 238	771 824
Share of SME outstanding loans	% of total outst. business loans	17.39	15.61	17.92	17.50	17.71	15.90	15.38	14.62	13.42	12.84
New business lending, total	CAD million	..	..	..	..	126 181	141 640	151 027	168 677	188 350	203 041
New business lending, SMEs	CAD million	..	..	..	..	20 176	21 670	22 806	23 179	23 971	22 745
Share of new SME lending	% of total new lending					15.99	15.30	15.10	13.74	12.73	11.20
Outstanding short-term loans, SMEs	CAD million	15 056	..	..	..	6 911	..	..	15 600	..	..
Outstanding long-term loans, SMEs	CAD million	21 118	..	..	..	12 763	..	..	12 400	..	..
Total short and long terms loans, SMEs	CAD million	36 174	..	..	..	19 674	..	..	28 000	..	..
Short-term loans, SMEs	% of total SME loans	41.62		43.40	36.30	35.13	39.00	46.00	55.71	47.20	36.20
Government loan guarantees, SMEs	CAD billion	1.2	1.3	1.2	1.3	1.3	1.1	1.1	1.5	1.2	1.3
Loans auth., small bus.	CAD million	36 174	..	..	..	19 674	..	..	23 000	..	..
Loans req., small bus.	CAD million	42 259	..	..	..	21 647	..	..	27 400	..	..
Authorisation ratio, small business	%	85.6	..	72.1	87.9	90.9	91.5	87.3	83.9	91.4	86.2
SME loan applications	applications/ total number of SMEs	17.0	..	14.9	18.0	24.0	26.0	30.0	27.8	23.0	26.0
Interest rate, SMEs	%	7.5	..	6.2	5.8	5.3	5.4	5.6	5.1	5.1	5.3
Collateral, SMEs	% of SMEs needing coll. to obtain loans	47.7	..	56.1	66.7	64.8	76.0	56.0	66.6	80.0	74.0
Rejection rate	Debt financing request denied (%)	..	..	..	9.0	8.0	7.0	9.0	12.8	7.0	9.0
Non-bank financing
Venture and growth capital	CAD billion	..	..	..	..	..	..	1.9	2.0	2.3	3.2
Venture and growth capital	%, year-on-year growth rate	..	..	..	..	..	..	..	5.3	15.0	39.1
Leasing request rate	Leasing appl./total number of SMEs	20.8	..	1.0	2.0	7.0	8.0	11.0	7.9	8.0	9.0
Leasing approval rate	% of leasing appl. approved	93.0	..	76.0	97.0	97.3	95.0	95.0	98.6	94.0	94.0
Other indicators
90-Day Delinquency Rate Small business	% of loans outstanding	0.69	1.01	1.42	0.8	0.62	0.57	0.41	0.43	0.58	0.49
90-Day Delinquency Rate Medium business	% of loans outstanding	0.05	0.06	0.36	0.2	0.04	0.01	0.02	0.02	0.03	0.12

Source: See Table 5.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-17-en

Chile

Economic growth in Chile has slowed down in recent years, facing a declining trend since 2013. After a small rally from 1.9% to 2.3% in growth rate from 2014 to 2015, it fell to 1.6% in 2016. These growth rates are considerably below the levels of 2011-13, which ranged from 4.1-5.8%. This slowdown has negatively affected credit lending, which grew by only 4.5%, in 2015-16. However, the SME share increased during the same period, and at 19.5% in 2016, it stood at the highest level since a decade. SMEs’ contribution to employment has remained stable, with an employment rate of 46% of the population.

The stock of SME outstanding business loans has been increasing since 2007, with micro and small enterprises mainly responsible for the rise. Banco Estado has been the main financial institution working to improve access to financing for SMEs.

However, credit conditions have worsened for SME in recent years. According to the Central Bank, SMEs display a stronger credit demand and face a more restrictive credit supply. Nevertheless, credit approval conditions has remained stable since 2014 for both large firms and SMEs, and the interest rate spread between large firms and SMEs has fallen to 5.3 percentage points in 2016.

Rejection rates for SME loans dropped significantly from 41.4% in 2007 to 14.7% in 2009, but have remained steady since. In 2015, the utilisation rate was 96.7%, the highest it has reached since 2007. This is related to a shift toward bank financing as a primary source of funds, as opposed to own resources, as well as the decline in interest rates.

The Corporación de Fomento de la Producción’s (CORFO) venture capital funds and Start-Up Chile programmes are the main drivers of SME equity financing, although other private and public initiatives have been developed as well. Transaction costs associated with hiring lawyers/financial advisors/underwriters, registration fees, or fees associated with organising events like road shows continue to be an obstacle for SMEs.

The crowdfunding industry has faced considerable growth since the creation of the first Chilean crowdfunding platform, Cumplo, in 2012. In October 2016, a crowdfunding association, Asociación Chilena de Financiamiento Colaborativo (AFICO), was founded to create an autoregulation framework and a code of best practices to increase transparency for investors and for SMEs in the industry. Furthermore, the Financial Stability Council led by the Minister of Finance has established a working group to determine a regulatory framework for crowdfunding.

Payment delays to SMEs show a downward trend since 2010 with the average term of payment for the fourth trimester of 2016 at 45.9 days for SMEs and 61.5 days for large firms. Non-performing corporate loans remain stable and relatively low.

The Fondo de Garantía para Pequeños Empresarios (FOGAPE) and CORFO Credit Guarantee Schemes provide guarantee rights to financial intermediaries through an auction process. The number of operations and value of guarantee-backed credits increased for both compared to previous years. During 2016, Fondo de Garantía de Inversiones (FOGAIN) backed credits for CLP 751 billion, and FOGAPE for CLP 535 billion.

Table 3.6. Scoreboard for Chile

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	CLP billion	6 812	7 579	8 102	9 268	10 139	11 542	11 775	13 745	15 763	17 322
Outstanding business loans, total	CLP billion	40 905	49 890	46 293	48 136	57 178	64 564	69 771	76 407	84 924	88 746
Share of SME outstanding loans	% of total outstanding business loans	16.7	15.2	17.5	19.3	17.7	17.9	16.9	18.0	18.6	19.5
New business lending, total	CLP billion	..	..	..	53 261	57 969	57 972	58 070	63 900	67 800	67 423
New business lending, SMEs	CLP billion	..	..	..	2 610.4	3 085.1	3 762.5	3 806.2	4 360.6	5 114.9	5 092.1
Share of new SME lending	% of total new lending	..	..	..	4.9	5.3	6.5	6.6	6.8	7.5	7.6
Short-term loans, SMEs	CLP billion	..	..	..	1 571.5	1 951.9	2 268.0	1 817.9	1 828.7	1 885.8	1 822.1
Long-term loans, SMEs	CLP billion	..	..	..	1 038.9	1 133.2	1 494.5	1 988.4	2 531.9	3 229.2	3 270.0
Share of short-term SME lending	% of total SME lending	..	..	..	60.2	63.3	60.3	47.8	41.9	36.9	35.8
Government loan guarantees, SMEs	CLP billion	217.4	298.5	778	1 128.4	1 268.8	1 869.5	1 943.0	1 582.0	1 678.7	1 756.7
Government guaranteed loans, SME	CLP billion	313.7	486.7	1 296.2	1 798.6	1 967.7	2 885.7	3 146.9	2 318.1	2 447.6	2 570.6
Non-performing loans, SMEs	% of all SME loans	..	..	5.9	6.1	5.5	5.4	6.1	6.1	5.9	5.5
Interest rate, SMEs	%	..	..		..	..	..	11.8	10.3	9.3	9.3
Interest rate, large firms	%	..	..		..	..	..	4.7	4.0	3.8	4.0
Interest rate spread	% points	..	..		..	..	..	7.1	6.3	5.5	5.3
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	44.0	..	49.8	..	..	..	72.8	..	68.1	..
Percentage of SME loan applications	SME loan applications/total number of SMEs	32.9	..	32.4	..	..	..	26.4	..	24.6	..
Rejection rate	1-(SME loans authorised/requested)	41.4	..	15.0	..	..	..	12.3	..	14.7	..
Utilisation rate	SME loans used/ authorised	86.6	..	91.0	..	..	..	87.9	..	96.7	..
Non-bank finance
Venture and growth capital	CLP billion	26.7	19.3	22.2	27.1	33.9	43.1	30.8	43.2	34.7	..
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-27.8	15.3	22.0	25.1	27.0	-28.5	40.1	-19.6	..
Leasing and hire purchases	CLP billion	2 981.4	3 625.0	3 474.3	3 782.3	4 502.9	5 004.8	5 555.0	6 223.2	6 571.5	6 672.4
Factoring and invoice discounting	CLP billion	2 018	2 023	1 379	1 918	2 402	2 638	2 612	2 568	2 552	2 689
Other indicators
Payment delays, B2B	Number of days	..	..	..	75.8	74.9	56.7	52.7	55.2	58.0	54.9
Bankruptcies, SMEs	Number	122	127	125	136	146	146	164	6	154	295
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	4.1	-1.6	8.8	7.4	0.0	12.3	-96.3	2 466.7	91.6

Source: See Table 6.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-18-en

China (People’s Republic of)

In China, micro, small and medium enterprises (SMEs) represent a fundamental part of the economy. There were more than 20 million small companies and 54 million self-employed individuals in 2015. In 2016, new business creation reached record highs with an average 15 100 new companies being created daily, up by 25.8% compared to 2015.

The stock of SME loans increased to CNY 35 300.3 billion in 2015. As loan growth for SMEs usually outpaced total business loan growth in this period, the SME loan share of total business loans increased from 54.6% to 65.5% over 2009-15. In 2015, the growth in the outstanding stock of SME loans slowed down substantially.

Only 63.1 % of SMEs applied for bank financing in 2016, down by 6.8 percentage points from 2015. Additionally, new SME lending in 2016 totalled CNY 3 229.6 billion, a 10.3% reduction from the previous year.

In 2016, Chinese SMEs enjoyed slack credit conditions, as interest rates continued their downward trend for the fourth year in a row. In 2015-16, the surveyed lending rate for SMEs fell from 5.2% to 4.8% while that of large firms went from 5.3% to 4.9%. For the second year in a row, the interest rate spread between SMEs and large enterprises remained negative, even widening slightly in 2016.

SMEs with qualified collateral are more likely to receive credit in China. Collateral requirements steadily increased year-on-year in the 2009-15 period, from 50.6% in 2009 to 55.7% in 2015, possibly contributing to the dip in SME loan applications. In contrast, the rejection rate for SME loan applications was 6.1% in 2016, down by 5.6 percentage points from 2015.

In 2016, payment delays for the B2B (business to business) and B2C (business to customer) sectors kept stable, albeit slightly increased to 65.2 days and 29.0 days, respectively. The percentage of SME non-performing loans increased to 2.6% in 2015 from 1.97% in 2014. In contrast, the bankruptcy rate for SMEs was at 4.7% in 2016, continuing its year-on-year decline since 2013.

In 2015, the national SME development fund was established through the PPP model and with CNY 60 billion. The first regional subsidiary fund of the national SME development fund was established in Shenzhen City in 2016. In the same year, the National Guide Fund for Venture Investment in Emerging Industries with a scale of CNY 40 billion was officially put into operation. In 2017, Special Funds for SME Development changed its funding system to initiate a national programme of innovative demonstration cities for small and micro-enterprises.

In 2016, the total financing amount of issuing bonds amounted to CNY 1 283.0 billion, and equity financing on the domestic stock market by non-financial enterprises totalled CNY 587.6 billion. The demand for equity financing of SMEs is gradually met through the rapid development of China’s multi-level capital market. Total venture capital investments in 2015 amounted to CNY 336.1 billion, up by 14.6% over the previous year and more than three times the level in 2007. Seed and early stage capital account for 29.6% of this amount, a 4.3 percentage point increase from 2014.

Table 3.7. Scoreboard for China

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	CNY billion	..	..	13 616.4	17 138.9	21 167.5	25 355.5	28 584.8	33 301.8	35 300.3	..
Outstanding business loans, total	CNY billion	..	..	24 939.7	30 291.5	35 016.9	39 282.9	44 019.2	52 162.4	53 895.4	..
Share of SME outstanding loans	% of total outst. business loans	..	..	54.60	56.58	60.45	64.55	64.94	63.84	65.50	..
Share of short-term SME lending	% of total SME lending	..	..	..	..	..	..	56.10	49.24	47.56	54.69
Direct government loans, SMEs	CNY billion	..	..	..	1 222.6	1 550.0	1 813.4	2 082.4	2 470.0	2 820.0	..
Non-performing loans, total	% of all business loans	..	..	2.58	1.76	1.26	1.21	1.25	1.49	2.04	..
Non-performing loans, SMEs	% of all SME loans	..	..	3.83	2.52	1.75	1.65	1.66	1.97	2.59	..
Non-performing loans, total (amount)	CNY billion	..	..	642.5	532.0	442.6	477.1	549.0	779.7	1 100.2	..
Non-performing loans, SMEs (amount)	CNY billion	..	..	521.8	431.8	370.0	417.8	475.6	657.1	915.5	..
Interest rate, SMEs	%	..	..	..	..	..	..	8.39	7.51	5.23	4.77
Interest rate, large firms	%	..	..	..	..	..	..	7.72	7.47	5.26	4.89
Interest rate spread	% points	..	..	..	..	..	..	0.67	0.04	-0.03	-0.12
Collateral, SMEs	% of SMEs needing collateral	..	..	50.55	51.64	51.59	52.98	54.52	54.76	55.67	..
Percentage of SME loan applications	SME loan appl./ number of SMEs	..	..	..	..	..	..	..	..	69.88	63.06
Rejection rate	1-(SME loans auth./ requested)	..	..	..	..	..	..	6.19	11.97	11.72	6.13
Utilisation rate	SME loans used/ authorised	..	..	..	..	..	..	93.51	94.75	94.48	94.03
Loan fee, SMEs	% of loan amount	..	..	..	..	..	..	3.70	1.38	1.29	1.27
Non-bank finance
Venture and growth capital	CNY billion	111.29	145.57	160.51	240.66	319.8	331.29	263.9	293.33	336.12	..
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	30.80	10.26	49.93	32.88	3.59	-20.34	11.15	14.59	..
Venture and growth capital(seed, early st.)	CNY billion	24.04	41.34	52.49	66.42	61.08	85.8	91.31	74.34	99.63	..
Venture and growth capital(gr., later st.)	CNY billion	87.25	104.23	108.02	174.24	258.72	245.49	172.59	218.99	236.49	..
Leasing and hire purchases	CNY billion	24	155	370	700	930	1 550	2 100	3 200	4 440	5 330
Factoring	EUR million	..	55 000	67 300	154 550	274 870	343 759	378 128	406 102	352 879	301 635
Other indicators
Payment delays, B2B	Number of days	..	..	..	..	..	..	95.91	72.31	64.44	65.21
Payment delays, B2C	Number of days	..	..	..	..	..	..	48.38	42.64	27.43	28.96
Bankruptcies, SMEs	Number	..	..	..	..	..	..	7.57	7.24	5.46	4.73
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	..	..	..	..	..	..	-4.36	-24.59	-13.37

Source: See Table 7.8 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-19-en

Colombia

Microenterprises and SMEs (MSMEs) account for an important part of the Colombian economy, employing around 80% of the country's labour force and contributing 40% of GDP in 2016.

Bank credit is the main source of financing for SMEs: According to the survey of the National Association of Financial Institutions (ANIF), 42% of SMEs requested bank credit in 2016, on average. This percentage amounted to 46% in the industrial sector, 43% in the commercial sector and 39% in the services sector. When comparing these results with the ones from 2015, the credit request has decreased by 3 percentage points (45% on average in 2015). These findings are consistent with the strong increase in interest rates during 2016, with fixed-term deposit rates (DTF) rising by 220 basis points. When it comes to financing options, micro, small and medium-sized enterprises seem to prefer suppliers, then leasing, thirdly their own resources and finally factoring.

The resources requested by SMEs were used mainly for working capital. In the second half of 2016, about 61% of requested resources were used for working capital within the industry sector (69% within the commercial sector and 54% in services). The consolidation of liabilities was the second main use of financial means. The percentage of companies that spent these resources to search for better terms regarding rates or amortisation of current loans with financial intermediaries was 23% in industry, 17% in commerce and 25% in services. The third reason for financing needs for the industrial sector was the purchase or leasing of machinery (19%), while the services sector were essentially seeking possibilities for remodelling or adjustments (18%). The commercial sector used financing for both, with purchase or lease of machinery and remodelling or adjustments having an equal share (both 13%).

In the period from 2015 to 2016, the value of loans to MSMEs increased by 6.7%, while the share of MSME loans in total commercial loans decreased by 0.18 percentage points from 25.7% in 2015 to 25.52% in 2016. The increase in interest rates in 2016 coincided with a 1.53% decrease in short-term loans and a 9.29% increase in the long-term borrowing by SMEs. The average interest rate on loans to SMEs increased by 2.17 percentage points from 14.69% in 2015 to 16.86% in 2016.

While the total number of bankruptcies from 2013 to 2014 decreased by 9.6%, from 156 to 141, an increase of 16.31% and of 21.95% can be observed for 2015 and 2016, respectively.

In 2016, company creation in Colombia rose by 15.8%. 299 632 productive units were created in 2016, 76 794 companies and 222 838 natural persons. The constitution of companies grew by 21.7% and registrations of natural persons increased by 14% compared to the previous year.

In 2016, the Second-tier Bancoldex bank, an entity attached to the Ministry of Commerce, Industry and Tourism, consolidated its strategy of being the best partner of Colombian entrepreneurs. The strategy goes beyond the provision of financial services and also focused on the added value of knowledge that complements credit and responds effectively to the needs of MSMEs.

In 2016, it supported Colombian entrepreneurs with resources that exceeded USD 1 048 million, supporting the growth of more than 105 000 companies of all sizes, located in 713 municipalities across the country. In cooperation with the World Bank International Finance Corporation (IFC) Bancoldex also set up a vehicle specialised in promoting the productive insertion and financial inclusion of microenterprises. Moreover, it created the first fund of Colombian funds that will mobilise third party resources of minimum USD 34 million to contribute to the growth of Colombian companies through intelligent capital and the linking of new financial intermediaries focused on the needs of entrepreneurs and companies at an early stage.

The Colombian Government seeks to facilitate access to credit for micro, small and medium enterprises through the National Guarantee Fund S.A. that grants credit guarantees. In a legal act deriving from a debtor's obligation vis-à-vis a financial intermediary, the fund pays all or part of the secured obligation against the debtor's default. In addition, law 1676 of 2013 on the registration of secured guarantees seeks to expand the possibilities of access to credit for entrepreneurs throughout the country.

Table 3.8. Scoreboard for Colombia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	COP trillion	25.61	28.59	26.58	29.12	39.97	46.76	51.60	55.23	58.17	62.09
Outstanding business loans, total	COP trillion	78.39	94.70	95.94	113.84	134.78	152.78	171.38	197.16	226.31	243.20
Share of SME outstanding loans	% of total outstanding business loans	32.67	30.18	27.70	25.58	29.66	30.61	30.11	28.01	25.71	25.53
New business lending, total	COP trillion	67.68	76.02	77.23	79.04	77.74	95.36	104.04	117.02	117.65	117.29
New business lending, SMEs	COP trillion	13.20	13.50	15.22	16.91	21.09	23.53	23.57	24.69	25.53	25.30
Share of new SME lending	% of total new lending	19.51	17.75	19.71	21.39	27.13	24.67	22.65	21.09	21.70	21.57
Short-term loans, SMEs	COP trillion	4.98	7.52	6.14	6.41	10.00	11.55	12.36	12.93	13.80	13.59
Long-term loans, SMEs	COP trillion	20.63	21.07	20.44	22.71	29.97	35.22	39.24	42.30	44.37	48.50
Share of short-term SME lending	% of total SME lending	19.44	26.30	23.11	22.02	25.02	24.69	23.96	23.40	23.73	21.89
Government loan guarantees, SMEs	COP trillion	0.56	1.39	1.82	1.94	5.46	6.19	7.14	7.51	7.72	10.52
Government guaranteed loans, SMEs	COP trillion	2.23	2.59	2.98	3.16	7.26	9.12	10.81	11.96	12.69	15.37
Non-performing loans, total	% of all business loans	0.95	1.27	1.59	1.07	1	1.03	1.08	1.33	1.34	1.51
Non-performing loans, SMEs	% of all SME loans	2.52	3.66	5.05	3.68	1.76	1.81	1.99	2.45	2.25	3.12
Interest rate, SMEs	%	20.09	23.13	20.43	18.66	14.34	14.68	13.24	13.54	14.69	16.87
Interest rate, large firms	%	12.53	14.24	10.09	7.23	9.28	9.25	7.98	8.33	8.78	11.00
Interest rate spread	% points	7.56	8.89	10.34	11.43	5.06	5.43	5.26	5.21	5.91	5.86
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	79.25	87.54	86.28	87.31	90.04	90.12	90.02	89.30	91.04	91.71
Percentage of SME loan applications	SME loan applications/ total number of SMEs	49	53	44.6	49.6	47	44	43.3	39.6	42.6	34
Rejection rate	1-(SME loans authorised/ requested)	2.0	4.0	9.0	5.0	3.0	4.0	7.0	3.0	7.5	4.0
Utilisation rate	SME loans used/ authorised	98	96	91	95	97	96	93	97	92.5	96
Non-bank finance
Venture and growth capital	COP billion									1 827	2 910
Venture and growth capital (growth rate)	%, Year-on-year growth rate										59.31
Leasing and hire purchases	COP billion	11 012	12 298	12 882	14 059	17 733	21 081	24 071	27 794	33 342	39 452
Factoring and invoice discounting	COP billion	5 774	6 039	7 152	7 011	12 845	10 552	17 555	23 747	31 474	25 768
Other indicators
Payment delays, B2B	Number of days	49	50	61	62	59	55	56	65	66	85
Bankruptcies, SMEs	Number	33	95	149	159	178	116	156	141	164	200
Bankruptcies, SMEs (growth rate)	%, Year-on-year growth rate		187.88	56.84	6.71	11.95	-34.83	34.48	-9.62	16.31	21.95

Note: Colombia uses the large-scale name system. However, for English-speaking countries the short scale is used, and this is used throughout the profile.

Source: See Table 8.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-20-en

Czech Republic

In 2016, there were roughly 1.1 million active enterprises in the Czech Republic. 99.8% of these firms were SMEs with less than 250 employees each. Together, they employed almost 1.8 million people or 58.4% of the Czech Republic’s workforce. Micro-firms dominated the business landscape, comprising 96.3% of all SMEs in 2015.

SME interest rates continued their decline in 2016 as they dropped by 20 basis points vis-à-vis 2015, reaching a record low at 2.5%. Over the 2007-16 period, SME interest rates dropped by 50.3% in total.

Venture capital investments peaked in 2008, and then declined dramatically up to and including 2016 to 10.2% of its peak value. Growth capital fell even more steeply, from EUR 192.0 million in 2009 to EUR 4.9 million in 2016.

Government support for enterprises and entrepreneurs primarily comprises measures with respect to developmental and operational financing, export support, support of the energy sector, development of entrepreneurial skills and financial literacy of entrepreneurs, technical education and research, as well as development and innovation.

In December 2012, the Czech government adopted a Small and Medium Sized Enterprises Support Strategy 2014-20 (SME 2014+), which represents the key strategic document for the preparation of the European Union (EU) cohesion policies over the 2014–20 programming period in the area of enterprise development. This is specifically for the preparation of the Operational Programme Enterprise and Innovations for Competitiveness (OPEIC), and similarly important national SME support programmes.

SME 2014+ also acknowledges the need to support social enterprises and strengthen social entrepreneurs’ education. The SME 2014+ concept is implemented through national programmes that support enterprises, such as the GUARANTEE, REVIT or Inostart programmes; and via the OPEIC.

SME 2014+ aims to motivate entrepreneurs to utilise available funding for the development of their businesses through national and EU programmes. This includes several tools, such as government loan guarantees (Czech-Moravian Guarantee and Development Bank), financing schemes for exporting SMEs (Czech Export Bank) and innovative businesses (INOSTART programme), as well as a programme to draw financial resources from the EU structural funds (OPEIC), which provides support to SMEs through grants, preferential loans and guarantees.

The Czech-Moravian Guarantee and Development Bank (CMGDB) is a specialised state-owned banking entity with a mission to primarily facilitate SME access to financing. In 2016, the bank obtained an additional CZK 10 billion from the European Fund for Strategic Investments to strengthen the national GUARANTEE programme. Another guarantee scheme, launched in April 2017 and administered by the CMGDB, is the EXPANSION programme. It aims to facilitate access of SMEs to bank loans by providing them with soft (subsidised, preferential) investment loan and a financial contribution in a form of interest rate subsidies of commercial co-loan (applicable only for projects in disadvantaged regions).

In June 2016, the Agency for Entrepreneurship and Innovation (API) was established. API is an implementing organisation for support programmes of the OPEIC. It has a branch in every region of the Czech Republic. Apart from administering OPEIC support programmes, it provides potential beneficiaries with information on the potential for financial support from the operational programme and holds expert workshops on OPEIC support schemes.

Table 3.9. Scoreboard for the Czech Republic

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	CZK million	476 267	555 030	527 545	550 072	587 908	589 675	610 789	621 385	652 590	703 141
Outstanding business loans, total	CZK million	745 797	850 765	784 069	783 538	831 206	840 593	871 578	890 229	935 364	995 318
Share of SME outstanding loans	% of total outstanding business loans	63.86	65.24	67.28	70.20	70.73	70.15	70.08	69.80	69.77	70.64
New business lending, total	CZK million	852 729	866 109	780 874	667 977	599 089	694 944	500 502	544 725	607 585	510 582
New business lending, SMEs	CZK million	208 216	207 237	147 740	123 398	124 117	129 830	86 660	97 764	118 217	100 464
Share of new SME lending	% of total new lending	24.42	23.93	18.95	18.47	20.72	18.68	17.31	17.95	19.46	19.68
Short-term loans, SMEs	CZK million	..	..	..	73 626	72 433	77 853	45 531	40 360	41 742	36 974
Government loan guarantees, SMEs	CZK million	1 925	3 529	6 369	6 593	472	1 534	3 251	4 010	6 913	3 530
Government guaranteed loans, SMEs	CZK million	2 959	5 094	9 550	10 070	630	2 215	4 616	5 771	9 947	5 055
Direct government loans, SMEs	CZK million	931	286	209	629	1 090	782	101	86	65	7
Non-performing loans, total (amount)	CZK million	22 816	35 340	61 904	70 166	67 876	61 480	62 032	58 694	52 677	50 288
Non-performing loans, total	% of all business loans	3.06	4.15	7.90	8.96	8.17	7.31	7.12	6.59	5.63	5.05
Interest rate, SMEs	%	5.03	5.57	4.64	4.01	3.73	3.48	3.13	3.76	2.70	2.50
Interest rate, large firms	%	4.05	4.84	3.46	3.34	2.63	2.43	1.89	2.00	1.80	1.80
Interest rate spread	% points	0.98	0.73	1.18	0.67	1.10	1.05	1.24	1.76	0.90	0.70
Non-bank finance
Venture and growth capital	EUR thousand	120 789	103 986	219 659	151 222	18 284	9 492	20 392	34 936	10 420	9 061
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	- 13.91	111.24	- 31.16	- 87.91	- 48.09	114.83	71.32	- 70.17	- 13.04
Other indicators
Payment delays, B2B	Number of days	16	18	19	14	14	15	14	14	14	19
Bankruptcies, SMEs	Number	839	873	1 280	1 301	1 263	1 345	1 379	1 228	1 001	904
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	4.05	46.62	1.64	- 2.92	6.49	2.53	- 10.95	- 18.49	- 9.69

Source: See Table 9.3 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-21-en

Denmark

In 2015 SMEs accounted for 98.5% of all enterprises in Denmark, disregarding non-employer enterprises.

SME lending suffered disproportionately in the aftermath of the financial crisis. The share of new business lending by SMEs relative to total new business lending declined from 12% in 2007 already low by international comparison to 9% in 2009 and remains low at 10% in 2016.

New lending to SMEs decreased by 30% in 2016 on a year by year basis after having increased by 34% in 2015.

Survey data illustrates that credit conditions have become more favourable in Denmark since 2014 with only two exceptions. Nonetheless, 16% of SMEs described their financial conditions as bad in the first quarter of 2017 down from 37% in the second quarter of 2012. Credit demand among small enterprises was much higher in the second quarter of 2017 compared to the same quarter in 2016 but less than the second quarter of 2015. Overall demand for bank credit by SMEs has been rising since 2016 with the exception of the first quarter in 2016 and 2017 respectively.

Interest rates for SMEs more than halved over the 2008-16 period from an average of 6.6% in 2008 to 2.7% in 2016. As interest rates for large enterprises declined even more strongly over this period the interest rate spread has widened from 0.9% in 2008 to 1.4% in 2016.

Venture and growth capital investments decreased 13% between 2015 and 2016 after having risen by 54% between 2014 and 2015. With recent increases venture capital and growth investments are at their second highest level in 2016 only beaten by 2015.

Payment delays declined from 9 days in 2014 to 4 days in 2015 and remained at 4 days in 2016 reaching a plateau following a continuous downward trend since 2012. Bankruptcies were up by almost 17% in 2016 after having increased 20% from 2014 to 2015 but remain significantly below levels observed in 2009 and 2010.

Vaekstfonden (The Danish Growth Fund) is a government backed investment fund created in 1992. Vaekstfonden offers guarantees and loans to established SMEs and entrepreneurs, invests equity in young companies with growth potential and has a fund-of-funds activity focusing on both venture and small and mid-cap funds. In 2013, Vaekstfonden introduced new direct loans for SMEs. In addition, the former scheme for loans targeted entrepreneurs and the credit guarantee programme were merged into a single scheme.

The amount of growth loan guarantees issued increased from a total loan amount of DKK 174 million in 2007, to DKK 470 million in 2015.

Table 3.10. Scoreboard for Denmark

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	2 436	2 488	2 126	1 896	1 681	1 613	1 653	1 699	1 671	1 706
Outstanding business loans, total	EUR million	6 800	7 203	6 858	6 455	5 945	6 148	6 249	6 437	6 803	7 344
Share of SME outstanding loans	% of total outstanding business loans	35.83	34.55	31.01	29.37	28.28	26.24	26.45	26.40	24.56	23.23
New business lending, total	EUR million	8 553	7 307	4 457	4 258	5 062	5 612	6 168	6 412	6 682	6 990
New business lending, SMEs	EUR million	3 600	3 523	2 126	1 866	1 955	2 122	2 370	2 463	2 254	2 365
Share of new SME lending	% of total new lending	42.09	48.21	47.70	43.82	38.63	37.80	38.43	38.42	33.73	33.84
Short-term loans, SMEs	EUR million	481	475	377	318	326	302	317	333	301	315
Long-term loans, SMEs	EUR million	1 956	2 013	1 749	1 578	1 355	1 311	1 336	1 366	1 370	1 391
Share of short-term SME lending	% of total SME lending	19.73	19.09	17.74	16.76	19.39	18.74	19.20	19.62	18.00	18.46
Government loan guarantees, SMEs	EUR million	15	19	36	42	32	43	34	46	44	51
Government guaranteed loans, SMEs	EUR million	27	32	55	64	50	66	53	71	67	77
Non-performing loans, total	% of all business loans	0.61	3.71	8.76	8.53	5.91	3.79	2.01	1.97	1.56	1.62
Non-performing loans, SMEs	% of all SME loans	0.95	3.59	7.36	8.17	6.31	5.18	3.27	2.96	2.79	2.88
Interest rate, SMEs	%	6.11	6.71	5.34	5.06	4.92	4.02	3.41	3.36	3.04	2.96
Interest rate, large firms	%	5.68	6.13	4.21	3.90	3.76	3.05	2.86	2.68	2.05	2.08
Interest rate spread	% points	0.43	0.58	1.14	1.16	1.16	0.98	0.56	0.68	0.99	0.88
Non-bank finance
Venture and growth capital	EUR thousand	..	4 744	4 507	17 745	5 529	16 600	10 900	48 200	14 000	49 000
Venture and growth capital (growth rate)	%, Year-on-year growth rate			- 5.0	293.7	- 68.8	200.2	- 34.3	342.2	- 71.0	250.0
Leasing and hire purchases	EUR million	891	710	223	281	519	650	546	537	543	676
Factoring and invoice discounting	EUR million	1 290	1 406	989	909	1 129	1 924	1 981	2 094	2 239	2 090
Other indicators
Payment delays, B2B	Number of days	9	8.1	12.7	12.8	10.2	10.1	9.4	7	6.9	6
Bankruptcies, SMEs	Number	202	423	1055	1028	623	495	459	428	376	335
Bankruptcies, SMEs (growth rate)	%, Year-on-year growth rate		109.4	149.4	- 2.6	- 39.4	- 20.5	- 7.3	- 6.8	- 12.1	- 10.9

Source: See Table 10.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-22-en

Estonia

In 2015, Estonian SMEs employed 79.6% of the workforce and accounted for 76.5% of value added. 90.7% of all firms were micro-enterprises, i.e. firms with less than 10 employees, employing 32% of the workforce and accounting for 26.8% of value added in 2015.

Lending to Estonian SMEs contracted significantly in the aftermath of the financial crisis, with new SME loans almost halving from EUR 3.6 billion in 2007 to EUR 1.9 billion in 2010. Following the rebound of the Estonian economy, new SME lending began to slowly pick up again from 2011 onwards, but remained below pre-crisis levels in 2016, as was the case for outstanding SME loans.

The base rate for the interest rate on SME loans up to EUR 1 million decreased steadily from 4.0% in 2012, slightly below 3.0% in 2016. For larger loans, the interest rate declined from 3.0% to 2.1% over the same period.

Venture and growth capital peaked in 2007 and 2008, and fell sharply in the following years, dropping to a low point in 2011, thus broadly following the trend of other European countries. In 2016, venture capital investments jumped 250% to reach their highest level ever.

Both new leasing and the outstanding stock of leasing declined sharply between 2008 and 2009 and only recovered somewhat in 2011. While the total outstanding factoring stock remained quite stable in recent years, factoring flows grew considerably and more than doubled between 2009 and 2016, from EUR 909.3 million to EUR 2 090.4 million.

Payment delays, bankruptcies and non-performing loans all increased sharply in the aftermath of the financial crisis, peaking in 2009-10, and starting to level out again in the following years. In 2016, payment delays continued to drop below their 2007 pre-crisis level; data on bankruptcies and non-performing loans show a marked and continuous decline from 2010 onwards. Non-performing loans in 2016 amounted to a 2.9% share of total SME loans, almost three times lower than its peak in 2010; SME bankruptcies declined by 10.9% year-on year and were similarly at about one-third of their 2009 peak.

The Estonian government does not provide any direct loans to companies. Instead, different guarantees are offered to SMEs, whose amounts have been rising in recent years. Up to 2016, subordinated loans financed 92 projects for a total amount of EUR 29.9 million and start-up loans added 433 projects financed for a total amount of EUR 11.7 million.

In 2016, the “EstFund” was created. EstFund is a fund-of-funds, set up by the Estonian Government and the European Investment Fund with the purpose to increase venture capital investments, mainly into Estonian SMEs. Together, EstFund invests EUR 60 million into venture capital funds, to which EUR 40 million will be added by private investors.

Table 3.11. Scoreboard for Estonia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	2 436	2 488	2 126	1 896	1 681	1 613	1 653	1 699	1 671	1 706
Outstanding business loans, total	EUR million	6 800	7 203	6 858	6 455	5 945	6 148	6 249	6 437	6 803	7 344
Share of SME outstanding loans	% of total outstanding business loans	35.83	34.55	31.01	29.37	28.28	26.24	26.45	26.40	24.56	23.23
New business lending, total	EUR million	8 553	7 307	4 457	4 258	5 062	5 612	6 168	6 412	6 682	6 990
New business lending, SMEs	EUR million	3 600	3 523	2 126	1 866	1 955	2 122	2 370	2 463	2 254	2 365
Share of new SME lending	% of total new lending	42.09	48.21	47.70	43.82	38.63	37.80	38.43	38.42	33.73	33.84
Short-term loans, SMEs	EUR million	481	475	377	318	326	302	317	333	301	315
Long-term loans, SMEs	EUR million	1 956	2 013	1 749	1 578	1 355	1 311	1 336	1 366	1 370	1 391
Share of short-term SME lending	% of total SME lending	19.73	19.09	17.74	16.76	19.39	18.74	19.20	19.62	18.00	18.46
Government loan guarantees, SMEs	EUR million	15	19	36	42	32	43	34	46	44	51
Government guaranteed loans, SMEs	EUR million	27	32	55	64	50	66	53	71	67	77
Non-performing loans, total	% of all business loans	0.61	3.71	8.76	8.53	5.91	3.79	2.01	1.97	1.56	1.62
Non-performing loans, SMEs	% of all SME loans	0.95	3.59	7.36	8.17	6.31	5.18	3.27	2.96	2.79	2.88
Interest rate, SMEs	%	6.11	6.71	5.34	5.06	4.92	4.02	3.41	3.36	3.04	2.96
Interest rate, large firms	%	5.68	6.13	4.21	3.90	3.76	3.05	2.86	2.68	2.05	2.08
Interest rate spread	% points	0.43	0.58	1.14	1.16	1.16	0.98	0.56	0.68	0.99	0.88
Non-bank finance
Venture and growth capital	EUR thousand	..	4 744	4 507	17 745	5 529	16 600	10 900	48 200	14 000	49 000
Venture and growth capital (growth rate)	%, Year-on-year growth rate			- 5.0	293.7	- 68.8	200.2	- 34.3	342.2	- 71.0	250.0
Leasing and hire purchases	EUR million	891	710	223	281	519	650	546	537	543	676
Factoring and invoice discounting	EUR million	1 290	1 406	989	909	1 129	1 924	1 981	2 094	2 239	2 090
Other indicators
Payment delays, B2B	Number of days	9	8.1	12.7	12.8	10.2	10.1	9.4	7	6.9	6
Bankruptcies, SMEs	Number	202	423	1055	1028	623	495	459	428	376	335
Bankruptcies, SMEs (growth rate)	%, Year-on-year growth rate		109.4	149.4	- 2.6	- 39.4	- 20.5	- 7.3	- 6.8	- 12.1	- 10.9

Source: See Table 11.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-23-en

Finland

In Finland, 99.3% of all employer firms were SMEs in 2015, employing 59.4% of the labour force. The number of employer firms decreased from 2014 to 2015, indicating that some employers have switched back into self-employment because of diminished demand for their products and services.

New SME lending continued expanding for the second year in a row, from EUR 8 444 million in 2015 to EUR 9 083 million in 2016. The share of new SME lending as a percentage of total new lending also increased in 2016.

Interest rates for both SMEs and large firms fell in 2016 and this also translated into a narrowing of the interest rate spread between the two. 35% of SMEs required collateral to obtain bank financing in 2016, down from 38% in 2015. The loan rejection rate, on the other hand, went up by 1% to 4% in 2016.

Although the amount of venture capital investments has decreased in the last couple of years, in 2015, investment activity in Finland was still the highest in Europe, when looking at the amount invested as a proportion of GDP (0.051%).

Average payment delays in Finland were historically low, compared to some other countries before the crisis. Finnish firms have a strong payment discipline, which they also maintained during and after the financial crisis.

The number of bankruptcies filed by SMEs in Finland fell for the third year in a row. 2 408 SMEs filed for bankruptcy in 2016, the lowest figure since 2008.

Finnvera is a financing company owned by the government of Finland and the country’s official export credit agency. Finnvera provides financing for the start-up, growth and internationalisation of enterprises, as well as guarantees against risks arising from exports. In 2015-16, a few improvements relating to SME financing granted by Finnvera were introduced. Because of the increased compensation of possible credit and guarantee losses, Finnvera was able to increase its risk-taking.

In 2016, there was an upswing in the Finnish economy. For example, the Ministry of Finance expects a GDP growth of 2.4% in 2017. These economic forecasts have also increased the demand for SME finance, as can be observed from the most recent Banking Barometers provided by Finance Finland.

Table 3.12. Scoreboard for Finland

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, total	EUR million	48 386	57 594	54 093	56 471	60 361	63 282	66 727	68 373	72 503	76 026
New business lending, total	EUR million	42 698	54 368	50 850	54 422	37 438	34 856	39 516	35 560	34 976	36 447
New business lending, SMEs	EUR million	11 576	11 881	9 944	8 300	7 902	7 749	7 330	6 832	8 444	9 083
Share of new SME lending	% of total new lending	27.11	21.85	19.56	15.25	21.11	22.23	18.55	19.21	24.14	24.92
Short-term loans, SMEs	EUR million	..	..	..	839	1 615	1 613	1 312	1 250	1 655	1 864
Long-term loans, SMEs	EUR million	..	..	..	3 314	6 287	6 136	6 018	5 583	6 789	7 219
Share of short-term SME lending	% of total SME lending	..	..	..	20.20	20.44	20.82	17.90	18.29	19.60	20.52
Government loan guarantees, SMEs	EUR million	416	438	474	447	497	408	379	476	522	570
Direct government loans, SMEs	EUR million	385	468	593	397	369	342	284	287	385	275
Non-performing loans, total	% of all business loans	..	..	..	..	..	..	..	..	4.07	3.07
Non-performing loans, total (amount)	EUR million	..	..	..	..	..	..	..	..	1 423	1 119
Interest rate, SMEs	%	5.39	5.58	3.02	2.66	3.23	2.86	2.81	2.94	2.96	2.76
Interest rate, large firms	%	4.83	5.08	2.24	1.86	2.59	2.07	1.91	1.92	1.46	1.33
Interest rate spread	% points	0.56	0.50	0.78	0.80	0.64	0.79	0.90	1.02	1.50	1.43
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	33	34	35	41	41	38	35
Percentage of SME loan applications	SME loan appli./ total # of SMEs	..	..	13.85	18.42	20.79	21.50	21.85	27.70	21.97	23.89
Rejection rate	1-(SME loans authorised/ req.)	..	..	6.98	4.92	3.12	8.08	7.06	6.71	6.24	5.59
Non-bank finance
Venture and growth capital	EUR million	189	218	146	351	148	185	173	168	190	196
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	15	-33	140	-58	25	-6	-3	13	3
Leasing and hire purchases	EUR million	..	..	1 067	1 361	1 566	1 765	1 658	1 858	..	..
Other indicators
Payment delays, B2B	Number of days	6	5	7	7	7	7	6	6	5	5
Bankruptcies, SMEs	Number	2 254	2 612	3 275	2 864	2 947	2 961	3 131	2 986	2 574	2 408
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	15.88	25.38	-12.55	2.90	0.48	5.74	-4.63	-13.80	-6.45

Source: See Table 12.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-24-en

France

France has approximately 3 million SMEs (including non-employer firms), and they account for 99.8% of all enterprises.

SME lending has remained relatively constant in the 2007-16 period, once amounts are adjusted for inflation, with the share of SME loans compared to total loans remaining around 20% during this time.

Overall, interest rates have decreased, but the interest rate spread indicates that this has occurred more to the advantage of large firms than to SMEs and micro-enterprises until recently.

Access to bank financing is generally fluid, with 79% of SMEs obtaining the totality of their required loans, while the euro area average equals 70%. This is due to the continuous progression of credit loans, easing of credit conditions (reduced interest rates, softer loan conditions), and increasingly successful credit requests rates.

Since 2012, the value of venture and expansion capital invested followed a consistently growing pattern, reaching EUR 4 727 million in 2016. The consolidation of private equity investments in SMEs - after a post-crisis period of sharp decline in investments - has been confirmed for all segments of private equity.

Factoring has continued to increase in France since 2009.

For the first time since the financial crisis, the number of SME bankruptcies dipped below 60 000. Delayed payments have decreased again in 2016 according to national surveys, after an increase in 2015. In terms of government efforts to keep funding available, the credit mediation scheme has been extended in 2015 in with respect to time (until the end of 2017) as well as to coverage (with difficulties encountered by firms in their relation with their factors now part of their mandate).

Setting up the proper framework conditions to boost investment, and especially intangible investment, has been the focus of public action. Special financing efforts have been made in this field for very small enterprises with Bpifrance’s online medium term loan covering both tangible and intangible investments (prêt de développement) to address their specific needs; and for industrial SMEs with the design of a dedicated instrument for the modernisation and transformation of production methods and processes (prêt Industrie du futur).The financing of their digital transformation is becoming a crucial issue for SMEs: while bank financing is available for tangible investments, it is rarely provided for the funding of a strategic counsel, employee training, website development or, for larger firms, the reorganisation of the production process. The two instruments set up by Bpifrance aim to complement bank loans to cover the whole range of transformation needs that SMEs have to face.

Table 3.13. Scoreboard for France

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	180 579	189 150	189 676	199 757	210 331	214 141	216 664	219 364	224 355	233 118
Outstanding business loans, total	EUR million	868 898	927 546	938 872	974 523	1 012 765	1 009 835	1 025 938	1 036 510	1 078 346	1 129 696
Share of SME outstanding loans	% of total outstanding business loans	20.78	20.39	20.20	20.50	20.77	21.21	21.12	21.16	20.81	20.64
Short-term loans, SMEs	EUR million	43 078	42 654	37 532	38 116	40 343	41 097	42 850	43 276	43 630	44 039
Long-term loans, SMEs	EUR million	119 657	121 860	108 750	104 069	111 575	118 877	125 468	129 927	132 782	137 448
Share of short-term SME lending	% of total SME lending	26.47	25.93	25.66	26.81	26.56	25.69	25.46	24.99	24.73	24.27
Government loan guarantees, total	EUR million	5 850	6 861	11 267	11 883	9 826	8 465	8 925	7 800	8 000	8 400
Government guaranteed loans, total	EUR million	2 707	3 219	5 752	5 326	4 231	4 157	4 394	4 783	4 984	..
Non-performing loans, total	% of all business loans	3.70	3.66	4.71	4.56	3.96	4.06	4.25	4.14	4.05	3.90
Interest rate, SMEs	%	5.10	5.42	2.86	2.48	3.11	2.43	2.16	2.08	1.78	1.50
Interest rate, large firms	%	4.52	4.76	1.96	1.57	2.23	1.72	1.46	1.30	1.19	1.14
Interest rate spread	% points	0.58	0.66	0.90	0.91	0.89	0.71	0.70	0.78	0.59	0.35
Collateral, SMEs	% of SMEs needing coll. to obtain bank loans	..	..	..	..	..	9.42	8.52	7.28	6.33	5.17
Percentage of SME loan applications	SME loan appli./ total # of SMEs	..	..	..	..	..	38.42	35.64	35.73	37.88	37.90
Rejection rate	SME loans authorised/ req.	..	..	..	..	..	11.12	8.00	6.61	7.55	6.21
Utilisation rate	SME loans used/ authorised	87.69	87.78	87.18	86.38	87.02	87.64	87.32	87.49	87.16	86.99
Non-bank finance
Venture and growth capital	EUR million	1 987	2 411	2 385	2 915	3 537	2 389	2 469	3 234	4 610	4 727
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	21.34	-1.08	22.22	21.34	-32.46	3.35	30.98	42.55	2.54
Leasing and hire purchases	EUR million	9 343	9 532	9 018	8 472	8 125	6 591	6 086	5 713	7 122	7 654
Factoring and invoice discounting	EUR million	18 758	20 305	17 719	20 133	23 033	23 764	26 393	29 583	34 904	..
Other indicators
Payment delays, B2B	Number of days	60.40	57.30	54.90	54.70	53.60	51.80	51.30	50.00	50.10	..
Bankruptcies, SMEs	Number	51 301	55 524	63 163	60 298	59 451	61 066	62 507	62 371	63 026	58 037
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	8.23	13.76	-4.54	-1.40	2.72	2.36	-0.22	1.05	-7.92

Source: See Table 13.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-25-en

Georgia

In 2016, in the framework of the National Strategy of SME Development, the Georgian National Statistics office introduced new methodology and definitions to calculate the statistics on SMEs in the country.

According to the new methodology, 99.7% of all firms in Georgia in 2016 were SMEs, accounting for 64% of total private employment. Additionally, they contributed 55.8% of total business sector turnover and 57% of production value in 2016, illustrating that the Georgian economy strongly depends on small and medium companies.

In line with the recent economic expansion, credit to SMEs rose year-on-year between 2010 and 2016 by more than 185% in total. Throughout that period, total business loans grew at a similar rate, although the proportion of SME loans as a percentage of total business loans remained relatively constant. The share of credit to SMEs peaked in 2015 at 42.9%; while in 2016 despite overall credit growth, share of SME loans decreased to 38.0%.

The average interest rate charged to SMEs in Georgia is high by OECD standards, but has significantly declined in recent years, from 16.5% in 2010 to 9.9% in 2016. In 2016, the average interest rate for SMEs significantly decreased by 2.80 percentage points year-on-year. Furthermore, reaching 0.20% by 2016 , the interest rate spread between SMEs and large firms decreased to record lows within the reference period, indicating that SMEs are increasingly benefitting from looser credit conditions.

Although exact data on the availability and use of alternative finance instruments is lacking, available evidence strongly suggests that Georgian SMEs are very dependent on the banking sector to meet their financing needs and that non-bank instruments play a marginal role in meeting their financing needs.

After the introduction of new legislation which allowed individual entrepreneurs to initiate procedures of enterprises' liquidation and bankruptcies, the figure rose more than 40 times from 2009 to 2010. This upward trend continued into 2011 with a 51.8% growth rate. From 2012 to 2015, that number has steadily declined by a cumulative 62%, except in 2014 when it remained largely constant. In 2016, it fell significantly by 85.3% to reach 229.

In 2016, the overall volume of non-performing loans among SMEs accounted to over GEL 206 million, which is the highest number since 2010. In the same year, the share of non-performing SME loans increased to 5.2%, from 4.4% in 2015.

To promote SME development and support competitiveness, the Entrepreneurship Development Agency (Enterprise Georgia) as well as Georgia’s Innovation and Technology Agency (GITA) were established under the Ministry of Economy and Sustainable Development of Georgia (MoESD). Both agencies provide financial support to SMEs, as well as a broader range of services such as mentoring, trainings and various advisory services.

In addition to the establishment of the agencies, the government of Georgia has introduced a number of private sector development programmes, which include financial and Technical Assistance (TA) components to support small and medium companies in different stages of development.

Table 3.14. Scoreboard for Georgia

Indicators	Units	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	GEL million	..	..	..	1 400	1 548	1 738	2 051	2 422	3 621	3 992
Outstanding business loans, total	GEL million	2 984	3 458	3 097	3 843	4 501	4 989	5 663	6 715	8 433	10 500
Share of SME outstanding loans	% of total outstanding business loans	..	..	..	36.43	34.39	34.84	36.22	36.07	42.94	38.02
Non-performing loans, total (amount)	GEL million	121	766	926	784	667	810	791	988	1 200	1 380
Non-performing loans, SMEs (amount)	GEL million	..	..	..	144	134	111	102	101	161	206
Non-performing loans, total	% of all business loans	..	..	..	16.10	11.50	12.20	10.70	10.60	9.80	10.10
Non-performing loans, SMEs	% of all SME loans	..	..	..	10.30	8.70	6.40	5.00	4.20	4.40	5.20
Interest rate, SMEs	%	..	..	..	16.50	15.50	14.50	11.60	10.70	12.70	9.90
Interest rate, large firms	%	..	..	..	13.60	14.10	12.80	11.20	10.00	11.40	9.70
Interest rate spread	% points	..	..	..	2.90	1.40	1.70	0.40	0.70	1.30	0.20
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	..	..	..	95.60	..	..	..
Rejection rate	1-(SME loans authorised/ requested)	..	..	..	..	..	..	4.60	..	..	..
Utilisation rate	SME loans used/ authorised	..	..	..	..	..	..	95.40	..	..	..
Other indicators
Procedures of enterprises' liquidation (incl. bankruptcy)	Number	119	61	52	2 094	3 176	2 524	1 775	1 785	1 560	229
Procedures of enterprises' liquidation (incl. bankruptcy) (growth rate)	%, year-on-year growth rate	..	- 48.7	-14.8	3 926.9	51.7	-20.5	-29.7	0.6	-12.6	-85.3

Source: See Table 14.7 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-26-en

Greece

99.9% of Greek enterprises are SMEs, of which micro-enterprises are the most numerous. Micro-enterprises also continue to contribute more toward employment and add more value in Greece than in other European countries.

The financial crisis and the ensuing sovereign debt crisis had a deep and pronounced impact on the Greek economy.

Bank funding dried up for Greek SMEs in the aftermath of the financial crisis. In 2009, new lending shrank by more than a tenfold when compared to data from 2007 and 2008. Although lending to SMEs recovered somewhat in 2010, the data show a clear downward path over the 2011-16 period. In 2016, new loans to SMEs more than halved vis-à-vis 2014.

The downward trend in SME lending has not reversed despite the improvement of the overall economic climate since 2014 and the forecasts of positive GDP growth in 2017 and 2018.

The SME interest rate has decreased in recent years, but remains much higher compared to other Eurozone economies, illustrating that the accommodative stance of the European Central Bank (ECB) had relatively little impact on Greek SMEs. The spread between SMEs’ and large firms’ interest rates increased in 2016 compared to 2014. The reduction of large firms’ interest rate was higher than the one for SMEs in the same period.

Leasing and hire purchases also suffered from the economic crisis and remain well below pre-crisis levels in 2016. By contrast, factoring and invoice discounting activities have remained relatively stable over 2007-16, and are on an upward path since 2014.

The Greek Government operates a number of loan guarantee programmes. There was a spike in these programmes between 2010 and 2011 but the sovereign debt crisis prevented Greece from continuing such support in 2012, when loan guarantees declined by 50%, and they have been on a declining path since. Various actions were announced by the Greek Government in 2016, focusing on the establishment of The Entrepreneurship Fund II and The Energy Saving Fund II. These use European Structural Investment Funds and national sources in parallel with programmes for the provision of short‑term and long-term export credit insurance to SMEs as well as the more intensive efforts for the increase of the European Investment Bank’s sources to banks doing business in Greece for the provision of various financial instruments to support Greek SMEs.

The government also supports equity financing through minority participation in venture capital funds, venture capital companies, and similar vehicles. Additionally, the Greek Government, with the cooperation of the European Investment Fund, announced the establishing of EquiFund for the provision of equity to enable high value-added investments.

Finally, various legislative actions were taken by the government with the cooperation of the Central Bank of Greece to address the serious increase of non-performing loans (NPLs) among Greek SMEs.

Table 3.15. Scoreboard for Greece

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	..	..	..	44 853	41 649	39 114	48 063	48 140	46 928	48 410
Outstanding business loans, total	EUR million	102 160	124 131	123 820	116 514	113 044	100 758	96 610	95 198	89 141	87 501
Share of SME outstanding loans	% of total outst. business loans	..	..	..	38.50	36.84	38.82	49.75	50.57	52.65	55.33
New business lending, total	EUR million	..	36 544	36 345	20 740	29 386	21 796	24 301	14 929	6 940	5 771
New business lending, SMEs	EUR million	..	12 502	12 954	4 437	5 217	4 115	3 654	2 332	1 178	1 064
Share of new SME lending	% of total new lending	..	34.21	35.64	21.39	17.75	18.88	15.03	15.62	16.97	18.43
Short-term loans, SMEs	EUR million	..	..	..	..	..	..	..	18 088	17 634	18 849
Long-term loans, SMEs	EUR million	..	..	..	..	..	..	..	30 052	29 294	29 561
Share of short-term SME lending	% of total SME lending	..	..	..	..	..	..	..	37.57	37.58	38.94
Government loan guarantees, SMEs	EUR million	19 929	23 232	25 587	22 438	19 951	19 315	17 234	16 509	15 121	12 805
Non-performing loans, total	% of all business loans	4.60	4.30	6.70	8.70	14.20	23.40	31.80	29.40	31.00	30.30
Non-performing loans, SMEs	% of all SME loans	..	..	..	..	..	..	..	41.20	44.10	43.20
Interest rate, SMEs	%	6.57	6.82	4.62	5.53	6.77	6.87	6.51	5.80	5.38	5.32
Interest rate, large firms	%	5.32	5.71	3.52	4.27	5.74	5.92	5.77	5.55	4.82	4.61
Interest rate spread	% points	1.25	1.11	1.10	1.26	1.03	0.95	0.74	0.25	0.56	0.71
Collateral, SMEs	% of SMEs needing coll. to obtain bank loans	..	..	51.41	40.52	49.43	46.69	45.93	46.24	49.21	39.81
Percentage of SME loan applications	SME loan appli./ total # of SMEs	..	..	37.91	39.64	30.75	29.92	21.36	25.53	18.80	21.50
Rejection rate	1-(SME loans authorised/ req.)	..	..	25.80	24.50	33.80	28.30	26.00	21.50	19.90	18.17
Non-bank finance
Venture and growth capital	EUR thousand	27 658	36 857	16 886	25 030	17 197	0	4 853	200	0	0
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	33.26	- 54.19	48.23	- 31.29	- 100.00		- 95.89	- 100.00	..
Leasing and hire purchases	EUR million	7 278	7 874	7 496	7 285	6 846	6 215	3 362	4 083	4 725	4 400
Factoring and invoice discounting	EUR million	1 279	1 725	1 767	1 730	1 493	1 534	1 410	1 694	1 693	1 716
Other indicators
Payment delays, B2B	Number of days	..	25	34	30	35	40	43	41	36	47
Bankruptcies, SMEs	Number	513	359	355	355	445	415	392	330	189	108
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	- 30.02	- 1.11	0.00	25.35	- 6.74	- 5.54	- 15.82	- 42.73	- 42.86

Source: See Table 15.6 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-27-en

Hungary

SMEs comprise 99.8% of all enterprises in Hungary. This figure is dominated by micro-firms and includes self-employed. Hungarian SMEs employ more people than most other EU countries in relative terms, with 69.7% of the labour force in Hungary in 2016 working in SMEs, compared to 66.8% in the EU on average. However, the share of value added by these SMEs is below the EU average.

New lending to SMEs shows an erratic pattern over the 2007-16 period, rising by 14.2% year-on-year in 2016, following sharp declines in 2014 and 2015.

Non-performing loans to SMEs rose fast in the aftermath of the financial crisis, reaching a peak of 20.7% in 2014. In 2015 and 2016, SME NPLs plummeted, reaching 6.3% in 2016. The NPL rate for all business loans followed a broadly similar trend, standing at 15.6% in 2014 and 4.7% in 2016.

Credit conditions have eased recently according to survey data. In addition, interest rates charged to SMEs have declined significantly in recent years from an average of 12.3% in 2009 to 4.2% in 2016.

In January 2016, the Hungarian Central Bank (MNB) launched the third phase of the Funding for Growth Scheme (FGS). This provides refinancing loans to commercial banks, which in turn lend the available resources to SMEs at a preferential interest rate of 2.5%. The FGS has two pillars of HUF 300 billion (EUR 963 million) each, supporting HUF investment loans and helping SMEs reduce their debt in HUF and foreign currency. In parallel, the Growth Support Programme was launched to help domestic banks return to market-based financing by gradually phasing out the FGS.

Several new Economic Development and Innovation Operational Programme (EDIOP), financial programmes, managed by the Hungarian Development Bank (MFB), were implemented in 2015 and launched in 2016 under the EDIOP framework, to increase the competitiveness of Hungarian SMEs and ensure better access to finance. The main financial tools are loans, loans combined with grants, and risk capital on the EDIOP priority fields of SME Competitiveness, Research and Development, and Employment.

In 2017, several new venture capital programmes have been introduced.

Loan guarantees are very common and widely used as credit collateral in Hungary. The two main guarantee institutes (Garantiqa Ltd. and Rural Credit Guarantee Foundation), have set well-developed work processes and activities in place in recent years. These positive changes in workflow support SME lending, and commercial banks tend to be more receptive to faster, online cooperation with the guarantee institute.

Table 3.16. Scoreboard for Hungary

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	HUF million	5 279 722	5 823 289	5 379 295	4 782 676	4 796 982	5 013 917	5 063 783	4 831 238	4 942 418	4 889 492
Outstanding business loans, total	HUF million	8 466 015	9 612 649	8 958 573	8 769 596	8 825 160	7 892 281	7 648 219	7 761 067	7 355 137	7 072 866
Share of SME outstanding loans	% of total outstanding business loans	62.38	60.57	60.04	54.54	54.36	63.53	66.21	62.25	67.19	68.12
New business lending, SMEs	HUF million	3 850 833	4 383 500	3 660 438	3 530 765	3 585 129	3 869 819	4 662 255	4 301 916	3 665 462	4 186 691
Short-term loans, SMEs	HUF million	2 473 389	2 965 962	2 832 008	2 774 744	2 767 147	3 051 599	2 654 230	2 570 341	2 424 162	2 708 451
Long-term loans, SMEs	HUF million	1 377 444	1 417 538	828 430	756 021	817 982	818 220	2 008 025	1 731 575	1 241 300	1 478 240
Share of short-term SME lending	% of total SME lending	64.23	67.66	77.37	78.59	77.18	78.86	56.93	59.75	66.14	64.69
Government loan guarantees, SMEs	HUF million	308 800	352 100	409 200	377 100	343 400	251 850	350 009	346 172	348 679	469 321
Government guaranteed loans, SMEs	HUF million	381 400	436 400	600 300	472 019	437 200	314 813	457 992	433 842	429 405	568 640
Non-performing loans, total (amount)	HUF million	..	..	..	832 213	1 155 259	1 271 799	1 124 012	960 640	696 589	332 424
Non-performing loans, total	% of all business loans	3.1	4.7	10.1	12.8	17.4	19.1	17.5	15.6	9.6	4.7
Non-performing loans, SMEs	% of all SME loans	..	5.4	8.9	12.8	15.9	20.5	18.6	20.7	13.7	6.3
Interest rate, SMEs	%	10.19	11.25	12.31	8.99	9.38	9.7	7.4	5.1	4.7	4.2
Interest rate, large firms	%	8.97	10.28	11.07	7.25	8.08	8.9	5.9	4.1	2.4	2.8
Interest rate spread	% points	1.22	0.97	1.24	1.74	1.3	0.8	1.5	1	2.3	1.4
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	..	..	..	..	71	64.5	60.1
Rejection rate	1-(SME loans authorised/ requested)	..	..	..	..	..	..	68.8	67	84.4	71.6
Utilisation rate	SME loans used/ authorised	..	..	..	..	..	..	81.5	..	..	..
Non-bank finance
Venture and growth capital	HUF million	3 949	13 782	720	6 982	11 308	19 361	15 880	18 759	19 626	12100..
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	249	-94.78	869.72	61.96	71.22	-17.98	18.13	4.62	-38.35
Leasing and hire purchases	HUF million	..	..	..	..	..	..	..	..	..	274 766
Factoring and invoice discounting	HUF million	..	..	..	..	..	..	..	..	..	126 038
Other indicators
Payment delays, B2B	Number of days	16.3	19	19	15	22.0	20	..	17.4	17.4	..
Bankruptcies, total	Number	152.6	168.4	211.6	231.8	279.2	301.3	375.9	644	488.3	376.9
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	10.35	25.65	9.55	20.45	7.92	24.76	71.32	-24.18	-22.81

Source: See Table 16.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-28-en

Ireland

Irish SMEs contribute to around two-thirds of employment, and this proportion increases to 69% when proprietors and family members engaged in the SME are taken into account.

Debt levels of Irish businesses are declining steadily and have reduced by 40% since 2010 from EUR 27.1 billion to EUR 16.1 billion in 2016.

New lending continues to grow with a 22% or EUR 589 million increase from 2015 to 2016.

Loan approval rates continue to be stable with 88% of applications either fully or partially approved.

The interest rate spread between large (2.18%) and small loans (4.65%) continues to increase.

The result of the UK European Union membership referendum may have an impact on credit conditions in Ireland due to uncertainties surrounding trading conditions.

The venture capital raised by Irish SMEs continues to grow reaching a total of EUR 888.1 million in 2016, a 70% increase on 2016.

Bankruptcies continue to decline with a total decline of 54% since their peak in 2011 and a 21% decline on 2015 in comparison to 2016 figures.

Significant progress has been made in resolving SME NPLs in recent years and NPL trends continue to move in a positive downward trajectory.

The SME State Bodies Group, which is an inter-departmental steering group, provides a forum for the development and implementation of policy measures to enhance SMEs' access to a stable and appropriate supply of finance. Some of the main policies introduced to encourage access to credit for small and medium businesses include:

• The Supporting SMEs Online Tool, a cross-government initiative, where on answering eight simple questions, the small business will receive a list of available Government supports;

• The Strategic Banking Corporation is an initiative designed to increase the availability of funding to SMEs at a lower cost and on more flexible terms than have recently been available on the Irish market;

• The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs;

• The Microenterprise Loan Fund provides support in the form of loans for up to EUR 25 000, available to start-up, newly established, or growing micro enterprises employing less than 10 people, with viable business propositions; and

• The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to EUR 3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. They also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment.

Table 3.17. Scoreboard for Ireland

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	..	..	..	27 103	27 339	25 697	24 516	21 402	19 313	16 114
Outstanding business loans, total	EUR million	56 076	59 568	52 496	42 419	40 309	38 064	36 651	31 792	29 815	28 004
Share of SME outstanding loans	% of total outstanding business loans	..	..	..	63.89	67.82	67.51	66.89	67.32	64.78	57.54
New business lending, SMEs	EUR million	..	..	..	2 284	2 211	1 990	1 905	2 401	2 646	3 235
Outstanding short-term loans, SMEs	EUR million	17 264	15 022	10 931	6 049	3 814	3 057	3 022	2 392	1 785	2 032
Outstanding long-term loans, SMEs	EUR million	2 118	1 929	1 338	929	575	536	604	778	1 092	996
Share of short-term SME lending	% of total SME lending	89.07	88.62	89.09	86.69	86.90	85.08	83.34	75.46	62.04	67.11
Non-performing loans, total	% of all business loans	..	..	..	..	17.69	23.66	26.14	23.88	17.16	13.92
Interest rate, SMEs	%	6.23	6.67	3.98	3.88	4.68	4.34	4.3	4.78	4.77	4.65
Interest rate, large firms	%	5.95	6.19	3.22	2.86	3.33	2.81	2.76	2.98	2.43	2.18
Interest rate spread	% points	0.28	0.48	0.76	1.02	1.35	1.53	1.54	1.8	2.34	2.47
Collateral, SMEs		..	..	..	..	..	..	..	41	40	46
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	36	39	36	31	30	23
Rejection rate	SME loans authorised/ requested	..	..	..	..	30	24	20	14	15	16
Utilisation rate	SME loans used/ authorised	..	..	..	..	..	..	81	82	84	75
Non-bank finance
Venture and growth capital	EUR million	225.9	242.9	288.1	310.2	274.4	268.9	284.9	400.7	522.1	888.1
Venture and growth capital	%, year-on-year growth rate	..	7.53	18.61	7.67	-11.54	-2.00	5.95	40.65	30.30	70.10
Other indicators
Bankruptcies, SMEs	Number	344	613	1 245	1 386	1 410	1 317	1 119	1 007	816	642
Bankruptcies, SMEs	%, year-on-year growth rate	..	78.20	103.10	11.33	1.73	-6.60	-15.03	-10.01	-18.97	-21.32

Source: See Table 17.10 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-29-en

Israel

Small and medium enterprises (SMEs) constitute the overwhelming majority of business enterprises in Israel. As of 2015, there are 518 135 businesses in Israel and 99.5% of them are SMEs which employ up to 100 workers each.

SME and entrepreneurship policies in Israel are primarily designed by the Ministry of Economy and Industry and implemented by the Israel Innovation Authority (IIA) and the Small and Medium Business Agency (SMBA). While the IIA (former known as the Chief Science Office) has a longstanding presence in the Israeli policy framework and focuses on technology-based start-ups and SMEs, the SMBA has been established more recently to cater to SMEs in traditional sectors through business management training and coaching, subsidised access to finance (for e.g. - through the management of the national loans guarantee programme) and a new network of business support centres (MAOF centres).

In March 2016, the credit data law was passed, which sought the establishment of a central database for household and SME credit by 2018. It is expected to improve competition and data accessibility in the Israeli credit market. In January 2017, a law that separates credit cards companies and banks was passed as part of a series of moves to enhance competition in the banking industry, and to lower the financing costs for SMEs.

In March 2017, the Israel Securities Authority completed the enactment of mass financing regulations for research and development companies, and for SMEs. In April 2017, the same agency published regulations that define regulation hierarchy and easements for small corporations that issued shares. That same month, the Knesset passed the Morality of Payments to Suppliers Law. This law determines the maximum period within which payments can be made to suppliers for the sale of goods, provision of services or performance of work. The purpose of the law is to reduce the payment period in the business sector to diminish the need for credit among SMEs and to increase transparency in payments.

For the first time in 20 years, a new company received a credit clearing license, allowing it to enter and compete in the credit cards market the following year. This is expected to lower the clearing costs of small and medium-sized businesses.

Table 3.18. Scoreboard for Israel

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	ILS million	169 300	171 200	161 600	173 800	177 700	187 000	186 700	211 900	255 779	256 820
Outstanding business loans, total	ILS million	413 900	460 900	425 200	438 900	458 600	450 400	445 700	447 900	411 682	416 853
Share of SME outstanding loans	% of total outstanding business loans	40.9	37.14	38.01	39.6	38.75	41.52	41.89	47.31	62.13	61.61
Government loan guarantees, SMEs	ILS million	27	17	121	164	116	116	215	232	257	..
Government guaranteed loans, SMEs	ILS million	170	109	757	1 028	890	1 057	1 951	2 112	2 340	1 838
Non-performing loans, total	% of all business loans	..	..	..	..	0.39	0.41	0.25	0.12	-0.14	-0.14
Non-performing loans, SMEs	% of all SME loans	..	..	..	..	0.53	0.47	0.4	0.35	0.14	0.2
Interest rate, SMEs	%	..	..	..	5	5.62	5.52	4.89	4.22	3.16	3.23
Interest rate, large firms	%	..	..	..	3	3.15	3.62	3.45	2.87	2.01	1.96
Interest rate spread	% points	..	..	..	2	2.47	1.9	1.44	1.35	1.15	1.27
Non-bank finance
Venture and growth capital	USD million	1 759	2 076	1 120	1 219	2 076	1 878	2 404	3 408	4 307	4 775
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	18.02	-46.05	8.84	70.3	-9.54	28.01	41.76	26.38	10.87
Other indicators
Payment delays, B2B	Number of days	..	..	..	..	..	..	..	..	..	57.2
Bankruptcies, SMEs	Number	..	..	2 061	2 834	3 737	5 000	5 610	5 322	5 175	..
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	..	..	37.51	31.86	33.8	12.2	-5.13	-2.76	..

Source: See Table 18.12 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-30-en

Italy

Small and medium-sized enterprises represent the overwhelming majority of Italian firms, account for around 80% of the industrial and service labour force, and generate over two-thirds of turnover and value added. The legacy of the crisis still weighs on the economic performance of micro and small businesses, while larger ones have already outpaced pre-crisis levels.

Against the backdrop of a gradual economic recovery, total business loans virtually stabilised in 2016. Lending turned upwards for large enterprises, while kept falling for smaller ones, resulting in a persistent gap in credit developments by firm size.

Lending standards remained broadly accommodative, albeit collateral requirement kept rising. The cost of credit dropped further: the average interest rate charged to SMEs reached the lowest level since the outbreak of the crisis, narrowing the spread between small and larger enterprises.

Credit quality gradually benefitted from the cyclical upturn. As a legacy of the deep recession, bad loans remained relatively high in 2016, but the flow of new non-performing loans to outstanding credit declined, a trend kept up in the first part of 2017.

Equity financing for SMEs, provided in the form of early stage and expansion capital, recorded a slight increase in 2016, after holding steady in the previous year; by contrast, resources devoted to firms of all sizes nearly doubled, partly recouping the slump occurred in 2015.

Payment delays reached the lowest level since 2008: the decline was less marked for micro-firms than for SMEs and large businesses. The economic recovery fostered a further improvement in payment patterns, both in agreed timeframes and average delays. Bankruptcies declined for the second year running since the onset of the crisis, down by 8% on the previous year.

The Central Guarantee Fund continued to play a key role in easing access to credit in 2016, providing EUR 11.6 billion in guarantees for just under EUR 17 billion worth of loans. Reliance on the Fund rose during the crisis in response to the upsurge in borrowers’ credit risk. The widespread increase in the coverage up to the maximum ceiling set by the regulation, leading to a growing absorption of public resources, has prompted a comprehensive overhaul of the system. The reform, which is due to come into effect in 2018, is based on a new evaluation system of firms’ creditworthiness, aimed at pursuing more targeted credit policies and promoting a more efficient allocation of public resources.

In order to widen firms’ financing opportunities, channelling private savings to investment in financial instruments issued by Italian companies, the 2017 budget law introduced long-term individual savings plans (piani individuali di risparmio or PIR), which are eligible for tax exemption. To ensure a regular inflow of funds to the issuing firms, fiscal incentives are granted only if the financial instruments included in the plans are held for a minimum of 5 years. A share of the assets held in the savings plans must be invested in financial instruments issued by companies other than those listed in the FTSE MIB index of the Italian stock exchange or in other regulated markets, thus providing a potential, alternative financing source for SMEs.

Table 3.19. Scoreboard for Italy

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	186 882	190 811	193 017	210 043	206 586	203 879	196 686	191 782	187 685	175 360
Outstanding business loans, total	EUR million	998 461	1 066 999	1 056 930	1 121 881	1 133 717	1 117 599	1 060 607	1 025 358	1 015 335	983 730
Share of SME outstanding loans	% of total business loans	18.7	17.9	18.3	18.7	18.2	18.2	18.5	18.7	18.5	17.8
Short-term loans, SMEs	EUR million	59 145	56 486	51 734	50 125	47 683	46 595	42 163	39 162	35 100	30 625
Long-term loans, SMEs	EUR million	114 978	120 450	124 813	135 965	132 856	128 361	122 158	115 469	112 448	103 345
Total short and long-term loans, SMEs	EUR million	174 123	176 936	176 547	186 091	180 539	174 956	164 321	154 631	147 549	133 971
Share of short-term loans, SMEs	% of short and long-term SME loans	34	32	29	27	26	27	26	25	24	23
Direct government loans, SMEs	EUR million	354	373	255	276	272	252	390	597	392	418
Government guaranteed loans, SMEs (CGF)	EUR million, flows	2 300	2 353	4 914	9 119	8 378	8 190	10 811	12 935	15 065	16 703
Government loan guaran., SMEs (CGF)	EUR million, flows	1 146	1 160	2 756	5 225	4 435	4 036	6 414	8 392	10 216	11 570
Non-performing loans, SMEs	EUR million	12 760	13 875	16 470	23 952	26 047	28 924	32 365	37 150	40 136	41 389
Non-performing loans, SMEs	% of total SME loans	6.8	7.3	8.5	11.4	12.6	14.2	16.5	19.4	21.4	23.6
Interest rate, SMEs	%	6.3	6.3	3.6	3.7	5.0	5.6	5.4	4.4	3.8	3.2
Interest rate, large firms	%	5.7	4.9	2.2	2.2	3.3	3.8	3.4	2.6	2.1	1.8
Interest rate spread	%	0.6	1.4	1.4	1.5	1.7	1.8	2.0	1.8	1.8	1.4
Collateral, SMEs	%	54	54	52	53	55	55	55	55	56	57
Rejection rate	% of firms reporting not obtaining (part) of the req. credit	3.1	8.2	6.9	5.7	11.3	12.0	8.9	8.4	6.0	4.0
Utilisation rate	SME loans used/authorised	79.7	80.7	80.7	82.8	83.6	85.7	85.7	86.1	85.8	84.2
Non-bank finance
Venture capital investments (early stage), SMEs	EUR million	66	115	98	89	82	135	82	43	74	103
Growth capital investments (expansion), SMEs	EUR million	295	440	260	263	500	504	438	230	170	155
Growth capital investments (expansion), total	EUR million	641	796	371	583	674	926	914	1 179	333	710
Other indicators
Payment delays, B2B (all firms)	Average number of days	..	23.6	24.6	20.0	18.6	20.2	19.9	18.5	17.3	15.4
Bankruptcies, total	Number	6 161	7 506	9 381	11 233	12 154	12 542	14 129	15 686	14 733	13 521
Bankruptcies, total	% y-on-y gr. rate		21.8	25.0	19.7	8.2	3.2	12.7	11.0	-6.1	-8.2
Incidence of insolvency, total	per 10 000 enterprises	11.2	13.7	17.0	20.2	21.6	22.0	25.0	27.9	26.4	24.1

Source: See Table 19.5 of the full country profile.

Statlink

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Japan

Japanese SMEs constituted 99.7% of all businesses and employed 34 million individuals, representing 70.1% of the private sector labour force in 2014.

Lending to SMEs continuously decreased every year between 2007 and 2012, by 6.6% in total. 2013 saw a reversal of this trend, with outstanding SME loans picking up again by 1.5%, and continuing to increase since then. Outstanding SME loans in 2016 reached JPY 265.6 trillion, slightly higher than its 2007 level.

Average interest rates on new short-term loans in Japan were very low and continuously declined between 2007 and in 2016, more than halving from 1.6% to 0.7%. Long-term interest rates on new loans followed a broadly similar pattern, declining from 1.7% in 2007 to 0.8% in 2016, and were thus only slightly higher than short-term interest rates.

Japanese venture capital investments peaked in FY 2007 at JPY 193 billion, and decreased by 29.5% and by a further 36% in FY 2008 and 2009, respectively. Total investments recovered in FY 2010 and 2011, but were down again in FY 2012. In FY 2013, venture capital investment added up to JPY 181 billion, thus approaching their pre-crisis level. In a reversal, 2014 once more saw a decrease of 35% compared to the previous year, but volumes recovered again in 2015, increasing by 11.1% to JPY 130 billion.

Leasing volumes to SMEs plummeted in the aftermath of the financial crisis, dipping by almost 40% between 2007 and 2009. Between 2010 and 2013, leasing volumes recovered again. Leasing volumes reached JPY 2.6 trillion in 2016, remaining a little over a quarter below 2007 levels, however.

SME bankruptcies, which account for more than 99% of all bankruptcies in Japan, decreased by 40% from 2007 to 2016, to hit their lowest figure in 26 years.

Total non-performing business loans have been in continuous decline since 2013, after showing an erratic movement over the 2007-12 period. They declined from 2008-10 and before increasing over the following two years, peaking at JPY 17 523 billion in 2011. In 2015, total NPLs declined by 8.9%, down to JPY 14 406 billion and further to JPY 11 787 billion in 2016.

The Japanese Government offers substantial financial support for SMEs’ financing needs, such as a credit guarantee programme and direct loans for SMEs. In March 2017, the total amount of lending outstanding for SMEs was approximated at JPY 237 trillion (provided by the following private financial institutions: domestically licensed banks and credit associations). The outstanding amount of the credit guarantee programme amounted to JPY 25.1 trillion, and the outstanding amount of the direct loan programme to JPY 21.2 trillion. The credit guarantee programme covers 1.3 million SMEs, and the direct loan programme, 1 million out of 3.8 million SMEs.

Table 3.20. Scoreboard for Japan

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	JPY billion	260 800	259 100	253 100	248 300	245 600	243 600	247 200	251 700	258 400	265 600
Outstanding business loans, total	JPY billion	374 476	384 962	379 347	366 103	366 907	370 438	369 680	387 211	395 206	405 092
Share of SME outstanding loans	% of total outst. business loans	69.64	67.31	66.72	67.82	66.94	65.76	66.87	65.00	65.38	65.57
Value of CGCs loan guarantees (Govern. loan guaran., SMEs)	JPY billion	29 368	33 919	35 850	35 068	34 446	32 078	29 778	27 701	25 761	23 873
Non-performing loans, total (amount)	JPY billion	17 068	17 122	16 782	16 628	17 186	17 274	15 319	13 937	12 778	11 787
Non-performing loans, total	% of all business loans	4.56	4.45	4.42	4.54	4.68	4.66	4.14	3.60	3.23	2.91
Prime lending rate for short-term loans	%	1.88	1.68	1.48	1.48	1.48	1.48	1.48	1.48	1.48	1.48
Prime lending rate for long-term loans	%	2.30	2.40	1.65	1.60	1.40	1.20	1.20	1.10	1.10	0.95
New short-term interest rate (Not only for businesses)	%	1.64	1.53	1.23	1.10	1.04	1.02	0.91	0.88	0.80	0.67
New long-term interest rate (Not only for businesses)	%	1.73	1.67	1.46	1.29	1.21	1.16	1.10	1.00	0.94	0.80
Outstanding short-term interest rate (Not only for businesses)	%	1.67	1.49	1.26	1.19	1.10	1.03	0.88	0.85	0.78	0.62
Outstanding long-term interest rate (Not only for businesses)	%	2.05	1.99	1.76	1.65	1.54	1.42	1.30	1.19	1.10	0.97
Non-bank finance
Venture capital investments (all stages total)	JPY billion	193	136	87	113	124	102	181	117	130	..
Venture capital invest. (all stages total)	%, year-on-year growth rate	..	-29.53	-36.03	29.89	9.73	-17.74	77.45	-35.36	11.11	..
Venture capital (seed and early stage)	% (share of all stages)	..	..	36.80	32.50	44.30	57.80	64.50	57.20	62.80	..
Venture capital (exp. and later stage)	% (share of all stages)	..	..	63.20	67.50	55.70	42.20	35.50	42.80	37.20	..
Leasing, SMEs	JPY billion	3 471	2 822	2 100	2 139	2 231	2 284	2 645	2 363	2 604	2 566
Other indicators
Bankruptcies, SMEs	Number	14 015	15 523	15 395	13 246	12 687	12 077	10 848	9 723	8 806	8 439
Bankruptcies, SMEs	%, year-on-year growth rate	..	10.76	-0.82	-13.96	-4.22	-4.81	-10.18	-10.37	-9.43	-4.17
Bankruptcies, total	Number	14 091	15 646	15 480	13 321	12 734	12 124	10 855	9 731	8 812	8 446
Bankruptcies, total	%, year-on-year growth rate	..	11.04	-1.06	-13.95	-4.41	-4.79	-10.47	-10.35	-9.44	-4.15

Source: See Table 20.4 of the full country profile.

Statlink

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Kazakhstan

In 2016, SMEs made up 96.1% of all businesses in Kazakhstan. The share of people employed by SMEs was 35.9% of the total employed population. SMEs contributed 23.1% to the country’s GDP that same year.

SME lending has been on the rise in Kazakhstan since 2014. Over the last three years, the SME loan portfolio has grown by a cumulative 73.7%, with new lending to SMEs increasing by 65.5% in the same period. Due to this, the SME loan share in total business loans reached 33.6% and that in new business lending, 25.7%.

Interest rates for SMEs have fluctuated over the reference period, growing steadily over the last two years from a record low of 11.5% in 2014. In 2016, they stood at 14.0%, lower than that of large enterprises which was 14.5%.

Among non-bank sources of finance, leasing has the largest market and is steadily growing. In 2016, leasing and hire purchases were 2.8 times their 2010 level. The factoring market is also developing dynamically. Originally started by independent factoring companies, it has now entered the sphere of interest of commercial banks.

Non-performing loans with arrears of more than 90 days (NPL) in banks’ portfolio among both total business loans and SME loans fell in 2016 to 6.7% and 8.8%, respectively. This decline from 2015 is attributed to commercial banks’ fulfilment of requirements of the National (Central) Bank of Kazakhstan that the maximum appropriate NPL level should be no more than 15% of the total loan portfolio in 2015 and no more than 10% of the same in 2016.

The state plays an important role in maintaining SME’s access to lending by placing funds in commercial banks that in turn provide concessional lending to businesses during liquidity shortages in the market. The largest placement of state funds for SME lending took place in 2009, when interest rate for SMEs was restricted to 11.5%. In 2014-15, interest rates for SMEs in manufacturing industry were restricted to 6%. As a result of these measures, the market experienced an unusual situation when there was a negative interest rate spread between SME interest rates and total business loan interest rates in 2009, 2015 and 2016.

Since 2010, under the “Business Roadmap 2020” Programme and through the “Damu” Entrepreneurship Development Fund, the government has provided subsidised interest rate expense and loan guarantees for SMEs. A new financial instrument in Kazakhstan, loan guarantees are becoming popular very quickly, escalating from just three guarantees in 2010 to 2 600 at the beginning of 2017. Simultaneously, the conditions and the process of receiving a guarantee are constantly being improved.

Table 3.21. Scoreboard for Kazakhstan

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	KZT billion	1 508	1 571	1 709	1 389	1 341	1 412	1 283	1 788	2 060	3 105
Outstanding business loans, total	KZT billion	5 220	5 605	5 879	5 892	6 849	7 534	8 110	8 533	9 027	9 234
Share of SME outstanding loans	% of total outstanding business loans	28.89	28.02	29.06	23.58	19.58	18.74	15.83	20.95	22.83	33.62
New business lending, total	KZT billion	7 764	5 373	3 742	3 291	4 795	5 774	6 109	8 044	7 345	7 724
New business lending, SMEs	KZT billion	1 870	1 273	753.1	690.1	794.5	1 050	889.7	1 198	1 279	1 984
Share of new SME lending	% of total new lending	24.08	23.70	20.13	20.97	16.57	18.18	14.56	14.90	17.41	25.68
Short-term loans, SMEs	KZT million	296 513	297 836	236 091	206 032	219 196	277 383	199 050	392 432	390 093	825 784
Long-term loans, SMEs	KZT billion	1 212	1 273	1 472	1 183	1 122	1 135	1 084	1 395	1 670	2 279
Share of short-term SME lending	% of total SME lending	19.66	18.96	13.82	14.83	16.34	19.64	15.51	21.95	18.93	26.60
Government loan guarantees, SMEs	KZT million	..	..	..	339	2 060	3 854	3 336	7 284	11 021	11 952
Government guaranteed loans, SMEs	KZT million	..	..	..	677	4 238	10 991	7 090	15 423	26 964	26 903
Direct government loans, SMEs	KZT million	5 526	125 226	257 389	132 907	82 704	78 205	85 842	188 426	236 891	247 275
Non-performing loans, total	% of all business loans	..	..	..	..	..	29.80	31.15	23.55	7.95	6.72
Non-performing loans, SMEs	% of all SME loans	..	..	..	..	..	22.33	22.40	11.74	12.69	8.79
Interest rate, SMEs	%	14.28	15.67	14.01	13.34	12.49	12.10	12.46	11.48	12.95	14.01
Interest rate, large firms	%	12.77	14.88	14.04	12.72	11.08	10.58	10.07	10.01	13.47	14.49
Interest rate spread	% points	1.51	0.79	-0.03	0.62	1.41	1.52	2.39	1.47	-0.52	-0.48
Non-bank finance
Leasing and hire purchases	KZT million	..	..	..	60 352	80 085	84 503	106 848	129 019	126 637	167 028
Factoring and invoice discounting	KZT million	..	..	..	..	..	7 889	15 125	33 160	37 655	..
Other indicators
Bankruptcies, total	Number	0	1	2	8	40	85	150	174	306	659
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	..	100.00	300.00	400.00	112.50	76.47	16.00	75.86	115.36

Source: See Table 21.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-33-en

Korea

SMEs constituted 99.9% of Korean enterprises in 2013, with the vast majority being micro enterprises employing up to 9 employees (93.2% of employer enterprises). In 2011, SMEs employed for the first time more than 50% of the country’s economically active population, with the number of SME employees standing at 1.3 million, according to Statistics Korea.

SME and total business loans increased over the2007-16 period by 65.4% and 82.7%, respectively. As loan growth in all business loans outpaced SME loan growth, the SME share of business loans declined from 86.8% in 2007 to 78.6% in 2016, still a high percentage by international standards.

The average interest rate charged on outstanding SME loans peaked in 2008 at 7.5%, then declined steadily to 3.9% in 2015, and further to 3.6% in 2016. Interest rates are still relatively high compared to most other OECD countries, which have often taken loose monetary stances, in contrast to Korea.

Venture and growth capital investments declined between 2007 and 2008, as in many other countries, but rebounded over 2009-11, exceeding their 2007 level. In 2016, venture capital investments grew slightly by 3.1% year-on-year, compared to 27.2% in 2015.

In 2016, payment delays again rose again somewhat to 13.3 days, which is longer than the 12.1 days-level observed in 2008 and 2010. Bankruptcies decreased to 555 from 720 in 2015, by 22.9% year-on-year. It should be noted that while SMEs avoided bankruptcy because of the policies of the central and regional governments, they were still financially stressed due to low economic growth. The proportion of NPLs decreased sharply in 2011, decreased more modestly over 2012-16 to a level of 1.4% in 2016.

In 2016, the outstanding government guaranteed loans were at KRW 62.6 trillion which included loans that were backed by two nationwide funds. Direct loans provided by the SBC totalled KRW 4.5 trillion in 2016. These loans try to remedy market failures and enhance the competitiveness of SMEs. The Korean Government is now actively looking for other cost effective ways to support SME lending. In addition, it is planning on improving the financial system, in order to intensively support innovative small and medium enterprises. To that aim, a new fund of funds for the Creative Economy (which was the previous administration’s main focus), that started to invest in innovative SMEs in 2014, raised additional funds worth of KRW 1.6 trillion in 2015.

The Bank of Korea raised the ceiling on its key loan facility for small and medium-sized enterprises by KRW 5 trillion in 2015. Additionally, as Korea’s National Assembly has passed the legislation to legalise crowdfunding, SMEs can more easily access equity financing through this alternative financing instrument. The most important change in the SME policy was the restructuring of relevant government institutions. Small and Medium Business Administration (SMBA) was reorganised and expanded into the Ministry of SMEs and Startups (MSS).

Table 3.22. Scoreboard for Korea

Indicators	Units	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	KRW billion	368 866	422 439	443 474	441 024	454 899	461 556	488 980	522 426	560 703	610 158
Outstanding business loans, total	KRW billion	424 796	511 201	531 072	541 070	585 697	618 117	654 366	705 956	755 958	776 382
Share of SME outstanding loans	% of total business loans	86.8	82.6	83.5	81.5	77.7	74.7	74.7	74.0	74.2	79
Outstanding Short-term loans, total; loans for operation	KRW trillion	319	375	373	372	388	395	405	419	426	414
Outstanding Long-term loans, total; loans for equipment	KRW trillion	106	136	158	169	197	223	249	287	330	362
Total short and long-term loans, total	KRW trillion	425	511	531	541	586	618	654	706	756	776
Short-term loans ; loans for operation	% of total business loans	75.0	73.4	70.3	68.7	66.3	63.9	61.9	59.4	56.4	53
Government loan guarantees, SMEs	KRW billion	39 730	42 961	56 381	56 195	55 457	56 940	59 517	60 336	60 947	62 670
Government guaranteed loans, SMEs	% of SME business loans	10.8	10.2	12.7	12.7	12.2	12.3	12.2	11.5	10.9	10
Direct government loans, SMEs	KRW billion	2 480	2 635	4 812	3 098	2 957	3 149	3 715	3 270	3 902	4 551
Loans authorised, SMEs	KRW billion	2 721	3 201	5 821	3 416	3 353	3 345	4 178	3 579	4 190	4 787
Loans requested, SMEs	KRW billion	4 653	6 057	9 819	6 657	5 928	5 738	6 937	6 717	7 091	7 075
Ratio of loans authorised to requested, SMEs	%	58.5	52.8	59.3	51.3	56.6	58.3	60.2	53.3	59.1	68
Non-performing loans, SMEs	KRW billion	..	7 581	6 969	11 516	8 241	9 137	10 040	9 872	10 118	8 442
Non-performing loans, SMEs	% of SME business loans	..	1.79	1.57	2.61	1.81	1.98	2.05	1.89	1.80	1.38
Average interest rate	%	6.95	7.49	6.09	6.33	6.25	5.83	5.06	4.65	3.91	3.58
Interest rate spread (between average rate for SMEs and large firms)	%	0.76	0.79	0.56	0.54	0.55	0.43	0.24	0.18	0.16	0.23
Equity
Venture capital, total amount invested	KRW billion	991.7	724.7	867.1	1 090	1 261	1 233	1 385	1 639	2 086	2 150
Venture capital	Year-on-year growth rate, %	..	-26.9	19.7	25.8	15.6	-2.2	12.3	18.4	27.2	3
Other
Payment delays, SMEs	Number of days past due date	11.0	12.1	9.9	12.1	11.7	9.1	9.7	10.0	9.2	13
Bankruptcies, total	Number	2 294	2 735	1 998	1 570	1 359	1 228	1 001	841	720	555
Bankruptcies	Year-on-year growth rate, %	..	19.2	-26.9	-21.4	-13.4	-9.6	-18.5	-16.0	-14.4	-23

Source: See Table 22.4 of the full country profile.

Statlink

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Latvia

In Latvia, 99% of economically active merchants and commercial companies (with some exceptions) are SMEs, and 90% of these SMEs are micro-enterprises.

The banking sector is an important source of financing for SMEs, after equity and short-term liabilities other than banking sector loans (including trade payables). In 2016, more than 20% of SME assets were estimated to be financed by the banking sector, according to the Bank of Latvia SME Lending Survey.

Given the importance of SMEs to the Latvian economy, credit to SMEs dominates the banking sector’s loans to non-financial corporations (NFCs). At the end of 2016, loans to SMEs comprised 77.5% of total loans to domestic NFCs. In 2016, the outstanding amount of loans to SMEs resumed growing after a prolonged period of decline following the financial crisis. However, it continues to remain well below pre-crisis levels. In 2016, banking sector loans to SMEs grew by 3.6% compared to a 1.6% growth in total loans to NFCs. The dynamics of new lending (flow) to SMEs is also positive.

Venture and growth capital has increased year-on-year for the third year in a row in 2016, and at EUR 79.4 million, is more than double its 2014 level, likely in part because of the active role the Latvian Government has played in the market. 186 venture capital investments were made in 2007-13.

The state promotes access to funding for firms that are unable to access necessary funding from commercial banks or private investors due to insufficient collateral, insufficient own capital, insufficient net cash flow, insufficient credit history and operational history, too high debt/net income ratio.

In addition, there are various state support programmes in the form of financial instruments such as loans, guarantees and equity measures introduced in 2007-13 and re-introduced in the programming period 2014-20. In the programming period 2007-2013 and till November 2016, 564 loan guarantees, 210 short term export credit guarantees, 28 mezzanine loans, 624 loans for start-ups, as well as loans for working capital, investments and microloans were issued.

Currently, state support programmes are introduced via JSC “Development Finance Institution Altum” (hereafter - ALTUM), a state-owned development finance institution offering state aid for various target groups with the help of financial tools. ALTUM develops and implements state aid programmes to compensate for market shortcomings that cannot be resolved by private financial institutions.

Table 3.23. Scoreboard for Latvia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	7 727	8 672	8 376	7 764	7 035	6 154	5 404	4 939	4 771	4 942
Outstanding business loans, total	EUR million	8 865	10 359	9 681	8 888	8 212	7 474	7 058	6 379	6 274	6 373
Share of SME outstanding loans	% of total outstanding business loans	87.16	83.71	86.52	87.34	85.67	82.34	76.57	77.43	76.05	77.55
New business lending, total	EUR million	..	..	..	..	1 708	1 914	1 965	1 268	1 346	1 795
New business lending, SMEs	EUR million	..	..	..	..	1 506	1 625	1 613	1 020	947	1 399
Share of new SME lending	% of total new lending	..	..	..	..	88.20	84.90	82.08	80.47	70.39	77.95
Short-term loans, SMEs	EUR million	2 653	3 203	3 262	3 009	2 682	2 349	1 852	1 570	1 672	1 371
Long-term loans, SMEs	EUR million	5 048	5 409	4 912	4 701	4 353	3 805	3 552	3 369	3 099	3 571
Share of short-term SME lending	% of total SME lending	34.45	37.19	39.91	39.03	38.12	38.17	34.27	31.79	35.05	27.73
Non-performing loans, total	% of all business loans	0.7	3.2	20.2	20.8	16.4	9.7	6.9	5.9	4.4	2.7
Non-performing loans, SMEs	% of all SME loans	0.8	3.7	22.4	23.4	18.8	11.7	8.4	7.2	5.7	3.3
Interest rate, SMEs	%	8.3	8.9	7.9	7.1	5.8	4.5	4.5	4.7	4.5	4.4
Interest rate, large firms	%	6.6	7.1	5.2	4.3	4.0	3.6	3.8	3.3	3.1	2.5
Interest rate spread	% points	1.7	1.8	2.7	2.8	1.8	0.9	0.7	1.4	1.4	1.9
Non-bank finance
Venture and growth capital	EUR million	..	..	..	..	..	..	..	37.95	51.98	79.37
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	..	..	..	..	..	..	..	36.97	52.69
Leasing and hire purchases	EUR million	1 576	1 594	1 145	841	810	867	875	864	932	939
Factoring and invoice discounting	EUR million	227	302	149	61	91	96	108	114	152	166
Other indicators
Bankruptcies, SMEs	Number	..	1 620	2 581	2 547	824	883	821	959	802	711
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	..	59.32	-1.32	-67.65	7.16	-7.02	16.81	-16.37	-11.35

Source: See Table 23.3 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-35-en

Luxembourg

The most recent data show that SMEs accounted for 99.5% of all non-financial business economy firms in Luxembourg in 2014. SMEs employed approximately 68.5% of the labour force and generated 68.7% of total value added.

New loans to all enterprises increased in 2016 compared to 2015 but remained below the peak of 2008. In 2016, large loans were nearly one-third of their amount in 2008. New loans to SMEs (defined as loans of less than EUR 1 million) continued to decrease for the fifth year in a row. The share of new loans to SMEs stood at 10.7% in 2016, the lowest figure since 2009 and well below the peak of 16.1% in 2011.

In 2016, the interest rate for SMEs amounted to 1.8%, down from 5.7% in 2008. The interest rates for SMEs remained systematically higher than the interest rate for large corporations in 2007-16, with a gap of 56 basis points in 2016. In relative terms, SMEs are paying 46.4% more in interest than large corporations.

Alternative forms of financing such as venture capital and factoring are on the rise and may hold high potential for SMEs seeking finance. In 2016, nearly EUR 189 million of venture capital was invested in Luxembourgish firms.

In 2015, 873 firms went bankrupt in Luxembourg, rising to 961 in 2016. Bankruptcies per 1 000 firms increased to 29 in 2016, compared to 24 in 2015.

A simplified form of société à responsabilité limitée ("S.à r.l.-S") entered in force in January 2017. The simplified S.à r.l.-, also dubbed “1-1-1 companies” (one person, one euro, in one day), can be created more quickly and with fewer start-up funds than a regular S.à r.l.-. The S.à r.l.-S is restricted to physical persons, and it is intended to facilitate the start-up and development of new business activities. In the period January- July 2017, 370 firms have been registered as S.à r.l.-S compared to a total of 6083 registrations.

Table 3.24. Scoreboard for Luxembourg

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
New business lending, total	EUR million	113 817	181 792	166 287	111 898	111 568	105 854	100 444	92 349	83 076	87 969
New business lending, SMEs	EUR million	12 800	14 555	14 754	15 441	17 979	15 593	13 713	10 765	10 142	9 395
Share of new SME lending	% of total new lending	11.25	8.01	8.87	13.80	16.11	14.73	13.65	11.66	12.21	10.68
Non-performing loans, all	% of all business loans	0.12	0.18	0.44	0.48	0.64	0.59	0.52	0.41	0.40	0.27
Interest rate, SMEs	%	5.51	5.72	2.81	2.71	2.68	2.22	2.05	2.08	1.88	1.75
Interest rate, large firms	%	4.96	4.97	2.59	2.30	2.62	1.86	1.64	1.47	1.42	1.20
Interest rate spread	% points	0.54	0.75	0.21	0.41	0.06	0.35	0.41	0.62	0.46	0.56
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	18.20	..	25.80	16.40	22.98	26.15
Non-bank finance
Venture and growth capital	EUR thousand	103 343	295 600	49 021	109 021	230 706	48 863	37 133	124 568	144 230	188 794
Venture and growth capital	%, year-on-year growth rate	..	186.04	-83.42	122.40	111.62	-78.82	-24.01	235.46	15.78	30.90
Factoring and invoice discounting	EUR million	…	…	349	321	180	299	407	339	..	..
Other indicators
Bankruptcies, Total	Number	659	574	693	918	978	1 050	1 049	850	873	961
Bankruptcies, Total	%, year-on-year growth rate		-12.90	20.73	32.47	6.54	7.36	-0.10	-18.97	2.71	10.08

Source: See Table 24.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-36-en

Malaysia

SMEs represent the vast majority of firms in the Malaysian economy, outnumbering large enterprises, both in terms of number and employment. According to the recently released Economic Census 2016, SMEs accounted for 98.5% of total business establishments in Malaysia in 2015.

The key role played by the financial system was reflected in the 9.2% growth in outstanding SME loans, amounting to MYR 281.5 billion at the end of 2015, compared to MYR 257.8 billion in 2014. Outstanding SME loans continued to grow in 2016, albeit at a slightly slower pace than in 2015, increasing by 7.7% to MYR 303.2 billion. Similarly, the share of SME lending in total business lending increased to 43.7% in 2016, from 42.9% in the previous year, and from 41.9% in 2014.

The annual average interest rate on SME loans by banking institutions (BIs) increased from 7.1% in 2014, to 7.5% in 2015, and decreased slightly to 7.2% in 2016.

As of the end of December 2016, there were a total of 109 registered venture capital corporations in the country, with a total of MYR 6.5 billion in committed funds under management, which represented a slight decrease of 8.5% year-on-year. Investments made in 2016 increased significantly by 56.2% to MYR 570 million, from MYR 365 million in 2015.

In 2016, the Credit Guarantee Corporation Malaysia Berhad (CGC) has approved a total of 7 568 guarantees and financing valued at MYR 4.2 billion.

Impaired financing, a proxy for non-performing loans, of the overall financial sector stood at 2.9% of total business loans, increased slightly from 2.8% in 2015 and 2.7% in 2014. Despite the rapid expansion of bank credit to SMEs, SME impaired financing substantively decreased from a peak of 7.5% in 2010, to 3.0% in 2016, and was thus almost on par with the share of large firms.

Since its inception in 2004, the National SME Development Council (NSDC) has continued to steer SME development in Malaysia by setting the strategic direction, and by formulating policies to promote the growth of SMEs across all economic sectors. The success of the NSDC can be measured through a number of outcomes, including the adoption of a national definition for SMEs, developing an SME database and statistics, monitoring and analysing SME performance to facilitate policy formulation, streamlining dissemination of information on SMEs, developing the SME financial infrastructure and endorsing the formulation of an SME Masterplan.

More recently, the policy focus of the authorities has been to further expand the non-bank avenues for risk capital, particularly to enhance access to finance for SMEs that are innovative, high-growth and active in new growth areas. The advent of Financial Technology (FinTech) is transforming the financial landscape and these are expected to offer more financing alternatives for SMEs, including equity crowdfunding, investment account platforms (IAP) and peer-to-peer (P2P) lending.

Table 3.25. Scoreboard for Malaysia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	MYR million	127 984	138 859	141 608	141 159	165 316	187 625	227 184	257 781	281 502	303 206
Outstanding business loans, total	MYR million	290 682	328 252	343 054	375 277	422 022	465 090	568 200	614 882	656 282	693 764
Share of SME outstanding loans	% of total outst. business loans	44.03	42.30	41.28	37.61	39.17	40.34	39.98	41.92	42.89	43.70
New business lending, total	MYR million	163 133	128 978	104 944	141 126	171 382	169 540	178 985	197 022	179 868	189 442
New business lending, SMEs	MYR million	63 240	58 946	50 896	62 181	75 241	84 667	90 326	82 609	75 899	78 279
Share of new SME lending	% of total new lending	38.77	45.70	48.50	44.06	43.90	49.94	50.47	41.93	42.20	41.32
Short-term loans, SMEs	MYR million	..	..	..	..	..	..	67 440	66 123	66 223	70 466
Long-term loans, SMEs	MYR million	..	..	..	..	..	..	159 744	191 657	215 279	232 740
Share of short-term SME lending	% of total SME lending	..	..	..	..	..	..	29.69	25.65	23.52	23.24
Guarantee and Financing Schemes (No. of accounts)	No. of Accounts	13 004	10 368	14 073	7 670	7 504	2 152	2 368	6 839	8 225	7 568
Guarantee and Financing Schemes (amount)	MYR million	4 567	3 014	3 112	2 495	2 861	1 066	1 546	3 175	3 356	4 224
Impaired financing, total (amount)	MYR million	..	17 668	14 259	17 256	15 350	12 513	17 548	16 572	18 555	20 365
Impaired financing, total	% of all bus. loans	..	5.38	4.16	4.60	3.64	2.69	3.09	2.70	2.83	2.94
Impaired financing, SMEs (amount)	MYR million	..	9 882	8 895	10 590	9 552	8 508	8 526	7 489	8 915	9 012
Impaired financing, SMEs	% of all SME loans	..	7.12	6.28	7.50	5.78	4.53	3.75	2.91	3.17	2.97
Interest rate, SMEs	%	..	6.39	5.50	5.69	5.74	5.72	6.00	7.12	7.53	7.22
Interest rate, large firms	%	..	6.08	5.08	5.00	4.92	4.79	3.73	5.43	5.02	4.66
Interest rate spread	% points		0.31	0.42	0.69	0.82	0.94	2.27	1.68	2.51	2.56
Collateral, SMEs	% of SMEs needing coll. to obtain loans	..	..	..	..	..	..	51.2	54.1	49.7	46
Percentage of SME loan applications	SME loan appl./ total # of SMEs	..	..	..	12.5	..	..	..	..	..	..
Non-bank finance
Total Venture and Growth capital	MYR million	1 784	1 929	2 586	3 389	3 586	2 757	3 433	3 246	2 221	2 923
Total Venture and Growth capital (gr. rate)	%, year-on-year growth rate	53.90	8.13	34.06	31.05	5.81	-23.12	24.52	-5.45	-31.58	31.61
Leasing & factoring	MYR million	..	..	..	..	721	918	1 099	1 170	1 086	834

Note: Malaysia uses the term "Impaired financing" instead of “non-performing loans”, “Total Investments during the year” instead of “Venture and growth capital”.

Source: See Table 25.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-37-en

Mexico

There are 4 million SMES in Mexico; 97.4% are microenterprises, which together contribute 12.4% of Total Gross Production and employ 47.2% of the work force.

Loan volumes to SMEs have increased in recent years, showing an average annual growth rate of 18.17% in the period from 2009 to 2016.In 2009, of the volume amounted to MXN 178.1 million, 30% of which went to microenterprises, 40% to small and the remaining percentage to medium-sized companies. This situation has changed considerably in 2016; of a credit portfolio of MXN 677.2 million, 38 percent was channeled to microenterprises, the percentage of the small business remained unchanged and the percentage for the medium company was reduced to 22%.

At the end of 2016, 350 541 SME received bank financing, 1.3 times more companies then were financed in 2009.

The average interest rate depends on the amount of credit and the size of the company. For large companies, the average interest rate is between 6% and 7% for simple and renewable credit, respectively. For SMEs, the rate ranges between 9.23% and 11% for the same products.

In recent years, the Mexican Government has developed a series of initiatives to support entrepreneurs and strengthen the access of SMEs to finance in particular, including programs to promote youth and women entrepreneurship, as well as various measures to strengthen financial instrument alternatives, most in particular, the use of venture capital by SMEs.

By directing the guarantee funds, it has been possible to develop specific programmes; programmes were developed to support the provision of credit in previously ignored sectors, such as the construction industry, travel agencies, real estate development SMEs, rural tourism SMEs, small taxpayers and SME government suppliers, among others.

Moreover, the increased competition between financial intermediaries has generated a significant improvement in credit conditions, such as longer loan maturities, lower interest rates, and in most cases (9 out of 10), the absence of security interest.

Table 3.26. Scoreboard for Mexico

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	MXN million	89 000	104 000	178 133	198 826	230 293	275 188	320 940	359 537	401 424	403 779
Outstanding business loans, total	MXN million	682 000	843 000	891 220	967 938	1 122 058	1 217 075	1 339 533	1 449 026	1 686 340	1 980 829
Share of SME outstanding loans	% of total outstanding business loans	13.05	12.34	19.99	20.54	20.52	22.61	23.96	24.81	23.8	20.38
Government loan guarantees, SMEs	MXN million	825	1 136	1 935	2 300	3 002	3 000	3 679	4 272	3 160	2 686
Government guaranteed loans, SMEs	MXN million	21 854	63 751	77 656	67 390	74 285	96 941	115 126	101 562	107 757	128 800
Direct government loans, SMEs	MXN million	..	..	29 538	30 796	53 335	62 995	88 118	135 363	183 770	..
Non-performing loans, total	% of all business loans	..	..	1.92	1.93	2.17	2.09	3.61	3.19	3.13	2.32
Interest rate, SMEs	%	..	..	11.88	11.7	11.26	11.04	9.8	9.14	9.08	9.2
Interest rate, large firms	%	..	..	8.13	7.92	7.69	7.59	6.56	6.04	6	5.69
Interest rate spread	% points	..	..	3.75	3.78	3.57	3.45	3.24	3.1	3.08	3.51
Non-bank finance
Private Equity	USD million	4 055	1 632	1 569	3 245	2 761	3 548	1 643	5 282	10 360	3 625
Private Equity	%, Year-on-year growth rate	..	-59.75	-3.86	106.82	-14.92	28.5	-53.69	221.49	96.14	-65.01
Venture and growth capital	USD million	..	102	128	15	111	52	229	231	207	165
Venture and growth capital	%, Year-on-year growth rate	..	..	25.49	-88.28	640	-53.15	340.38	0.87	-10.39	-20.29
Leasing and hire purchases	MXN million	..	..	4 528	3 889	3 210	2 012	400	..	..
Factoring and invoice discounting	MXN million	6 651	4 447	1 979	1 120	1 125	1 017	797	..	..

Source: See Table 26.3 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-38-en

The Netherlands

The recovery of the Dutch economy continued in 2016, with GDP showing a year-on-year growth rate of 2.2%, and unemployment decreasing by 0.9 percentage points down to 6%, the lowest percentage since 2013.

However, new lending to SMEs, after having peaked in 2011, has been dropping modestly year after year with the decline accelerating in 2016. Total outstanding business loans decreased by 5.7% year-on-year in 2016, while total business loans outstanding increased by roughly 7% over the 2010-16 period.

Since a peak in 2009, the percentage of loan applications is rather stable around 20%. The percentage of requested loans authorised in full rose from 74% in 2015 to 76% in 2016. The interest rate for small firms (2-49 employees) is higher than for large firms, a difference of 50 basis points, respectively 3.7% and 3.2%. Large firms’ interest rate increased by 80 basis points.

There was a substantial increase in equity investments in 2015, indicating that firms, both small and large, were increasingly seeking alternative sources of finance. However, the amount of investments decreased by 47% from EUR 537.9 million in 2015 to EUR 287 million in 2016.

The average number of days to receive a B2B payment was 32 days in 2016, with the average contractual term being 27 days. The average number of days of delay to receive a B2B payment therefore was 5 days in 2016. A decrease from 2015 with one day, and a great decrease compared to preceding years. The number of bankruptcies continued to decrease in 2016, with a year-on-year decrease of 16.5%.

Several programmes exist to support the access to finance of SMEs. These include different guarantee schemes, like the Guarantee Scheme for SMEs (BMKB) the Growth Facility (GFAC) or the Guarantee for Entrepreneurial Finance (GO). Qredits, a microcredit institution, introduced SME loans of different size in 2013 and in 2015 Dutch institutional investors founded the Dutch Investment Institution (NLII). It aims to create a better match between the supply and demand of long-term financing in the Netherlands that helps removing bottlenecks in the financing of sectors like that of SMEs. It has a subordinated loan fund of EUR 300 million and a business loan fund of a size of EUR 960 million.

Table 3.27. Scoreboard for the Netherlands

Indicators	Units	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, total	EUR billion	304.8	313.5	325.7	341.1	350	346.5	330.3	370.2	348.8
New business lending, SMEs	EUR billion	20.7	15.7	16.5	19.4	18.7	18.8	18	18.24	15.24
Short-term loans, SMEs	EUR billion	..	..	..	..	..	30.06	26.79	23.14	19.76
Long-term loans, SMEs	EUR billion	..	..	..	..	..	113.3	108.2	107.3	104.3
Short-term loans, SMEs	% of total SME business loans	..	..	..	..	..	0.21	0.20	0.18	0.16
Government loans guarantees, SMEs	EUR million	400	370	945	1 040	590	415	473	523	710
Loans requested, SMEs	% of SMEs requesting a bank loan		29	22	18	22	21	21	24	21
Loans authorised, SMEs	% of SMEs which requested a bank loan and received it in full	72	49	60	66	60	54	64	72	76
Interest rate, SMEs	%	5.7	4.5	6	6.4	5.1	4.3	4.1	4.4	3.7
Interest rate, large firms	%	..	..	..	3.5	3.6	3.4	2.8	2.4	3.2
Interest rate spread	%	..	..	..	2.9	1.5	0.9	1.3	2	..
Collateral, SMEs	% of SMEs required to provide collateral for last bank loan	..	47.0	45.0	44	47	50	43	29	34
Non-bank finance
Venture and growth capital	EUR million	270	639.5	207	413.5	266	303.4	258	537.9	287
Venture capital	Year-on-year growth rate, %	-37.21	136.85	-67.63	99.76	-35.67	14.06	-14.96	108.49	-46.64
Other indicators
Payment delays	Average number of days	13.9	16.0	17.0	18.0	18.0	17.0	16.0	6.0	5.0
Bankruptcies	Number	3842	6942	6162	6117	7349	8376	6645	5271	4399
Bankruptcies	Year-on-year growth rate, %	..	82.1	-11.2	-0.7	20.1	14	-20.7	-20.7	-16.54
Bankruptcies, total	Per 10 000 firms	104.44	188.77	168.7	167.97	202.99	236.91	188.32	149.56	124.84

Source: See Table 27.3 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-39-en

New Zealand

SMEs dominate the business landscape in New Zealand, constituting 99.0% of all firms in the country.

Bank lending to businesses in 2016 continued its upward swing post the global financial crisis, rising by another 5.9% above its all-time high level of the previous year to hit NZD 94.8 million. SME lending increased for the third year in a row, by 5.5% in 2016 to NZD 38.5 million, a small dip in growth rate from the previous year’s 6.7%. The growth rate in SME lending has shown more volatility than that of total business lending in the recovery since the financial crisis, even declining in 2011 and 2013. By contrast, total business lending has maintained an upswing since 2008, only declining slightly by 0.75 percentage points from 2015 to 2016.

In 2016, interest rates for both SMEs and large firms hit a decade-low of 9.2% and 4.6%, respectively. The interest rate spread in 2016 stood at 4.6%, a 1.5 percentage point increase from its 2007 level, indicating that SME borrowing has become relatively more expensive since the crisis, as compared to borrowing for large firms.

Rejection rates for SME loans increased strongly over the post-crisis period, almost doubling between 2007 and 2008, and then increasing further over the following two years. In 2010, over 20% of SME loan applications were rejected. Rejection rates fluctuated in 2011-15 before falling by more than half to stand at 4.8% in 2016, below the 2007 level.

Venture capital and growth investment increased to NZD 92.3 million and NZD 69.0 million, respectively, in 2016. There was a 47.7% increase in growth capital from 2015-16 and it was at a decade-long high in 2016. The information technology and software sector remained the main beneficiaries of these investments.

In 2016, the proportion of non-performing loans for all businesses stayed the same as the previous year, at 0.6%. Non-performing loans for SMEs increased slightly from 0.7% in 2015 to 0.8% in 2016.

New Zealand invoice payment times have fallen to their lowest point in over a decade, with businesses taking 34.9 days on average to pay their invoices during Q3 2016.

The government of New Zealand has a working capital guarantee for exporting SMEs in place. This programme is delivered through the New Zealand Export Credit Office (NZECO). In 2016, the government made changes to the mandate and some operational criteria and products to enable NZECO to support a wider range of SME firms and larger exporters, while helping NZECO develop a more diversified risk portfolio.

In 2016, a new regulatory framework for equity crowdfunding activities was introduced, allowing for NZD 14.9 million in retail investments through licensed platforms.

Table 3.28. Scoreboard for New Zealand

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	NZD billion	..	..	31.6	32.4	32.1	33.8	32.4	34.2	36.5	38.5
Outstanding business loans, total	NZD billion	74.2	82.0	75.0	73.6	74.7	77.4	80.3	83.9	89.5	94.8
Share of SME outstanding loans	% of total outstanding business loans	..	..	42.13	44.02	42.97	43.67	40.35	40.76	40.78	40.61
Non-performing loans, total	% of all business loans	..	..	1.7	2.1	1.8	1.5	1.1	0.8	0.6	0.6
Non-performing loans, SMEs	% of all SME loans	..	..	2.7	2.9	2.8	2.7	2.4	1.6	0.7	0.8
Interest rate, SMEs	%	12.15	11.19	9.82	10.12	10.02	9.55	9.53	10.26	9.41	9.21
Interest rate, large firms	%	9.00	8.23	5.70	6.30	6.05	6.01	5.38	5.95	5.38	4.60
Interest rate spread	% points	3.15	2.96	4.12	3.82	3.97	3.54	4.15	4.31	4.03	4.61
Rejection rate	1-(SME loans authorised/ requested)	6.92	11.57	18.40	20.94	11.38	14.64	9.43	8.36	10.59	4.83
Non-bank finance
Venture and growth capital	NZD million	111.4	98.7	77.2	147.5	71.4	56.7	108.0	111.7	123.7	161.3
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-11.40	-21.78	91.06	-51.59	-20.59	90.48	3.43	10.74	30.40
Other indicators
Payment delays, B2B	number of days	43.1	50.8	44.5	44.0	45.6	40.1	39.6	37.0	35.5	34.9
Bankruptcies, total	number	3 593	2 469	2 521	3 054	2 718	2 434	2 046	1 905	1 986	1 965
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	-31.28	2.11	21.14	-11.00	-10.45	-15.94	-6.89	4.25	-1.06

Source: See Table 28.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-40-en

Norway

97% of all firms in Norway employ less than 50 people. The SME definition in Norway differs from the definition in use in most EU countries.

After two years of decline, the outstanding stock of SME loans rose in 2014 by almost 10% year-on-year and by almost 16% in 2015. Preliminary figures show a decline of more than 6% in 2016, however. The SME share of overall business lending in 2016 has decreased to 2014 levels at around 36%.

Short term lending to SMEs as a share of overall lending to SMEs increased in recent years, but the vast majority of SME lending is long-term, possibly due to the strength of legal rights and the depth of credit information in Norway.

Credit standards have tightened between the first quarter of 2015 and the second quarter of 2016, after several years of easing. Demand for credit has weakened considerably since the second half of 2015.

Venture and growth capital investments have been growing since 2012. However, the respective growth rates of 0.73% and the 6% in 2015 and in 2016 are nowhere near the strong, double-digit growth observed in 2013 and 2014.

After an uptick in the number of bankruptcies in 2013 and 2014 by 16.3% and 3.0% year-on–year respectively, bankruptcies went down by 1.9% in 2015 and continued to decrease in 2016 as well, by 0.72%.

In 2015, the Norwegian government introduced a new action plan for entrepreneurship. The plan outlines the Government's policies to improve conditions for starting and developing new businesses in Norway, with an emphasis on capital, competence and culture. The action plan has a wide-reaching set of actions, including increased entrepreneurship grants; it strengthened the financing of commercialisation of publicly financed research, established new seed capital funds, and introduced a pre-seed capital fund that will invest in young companies in collaboration with private investors.

Table 3.29. Scoreboard for Norway

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	NOK million	358 963	451 130	416 407	433 844	454 031	452 815	433 061	474 908	550 037	515 151
Outstanding business loans, total	NOK billion	837	1 033	1 031	1 058	1 125	1 131	1 195	1 289	1 409	1 407
Share of SME outstanding loans	% of total outstanding business loans	42.88	43.65	40.40	41.03	40.35	40.04	36.23	36.84	39.04	36.62
Outstanding short-term loans, SMEs	NOK million	69 147	83 925	69 906	72 953	75 895	85 430	81 126	90 487	100 233	93 039
Outstanding long-term loans, SMEs	NOK million	289 816	367 205	346 501	360 081	378 136	367 385	351 935	384 421	449 804	423 111
Non-bank finance
Venture and growth capital	NOK million	39 888	29 597	14 577	30 305	39 262	37 699	63 228	74 553	75 094	79 622
Venture and growth capital	%, Year-on-year growth rate	..	-25.80	-50.75	107.90	29.56	-3.98	67.72	17.91	0.73	6.03
Other indicators
Bankruptcies, SMEs	Number	952	1 427	2 059	1 804	1 725	1 525	1 774	1 829	1 794	1 781
Bankruptcies, SMEs	%, Year-on-year growth rate	..	49.89	44.29	-12.38	-4.38	-11.59	16.33	3.10	-1.91	-0.72

Note: 2016 figures for Outstanding business loans, Outstanding short-term loans, Outstanding long-term loans and for Venture and growth capital are preliminary.

Source: See Table 29.3 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-41-en

Poland

The SME sector plays a major role in the Polish economy. In 2015, Polish SMEs employed almost 6.5 million employees - 69.1% of the enterprise-sector employment – and accounted for 57% of value added by the enterprise sector and 42% of all investment outlays.

The stock of SME loans increased for the third year in a row, and currently accounts for 56.1% of total business lending. The majority of SME loans are long-term loans and the share of short-term lending has followed a downward trend for the reference period.

In 2016, SME interest rates decreased for the fourth year in a row. Since its peak in 2008, it has decreased by 251 basis points from 5.4% in 2008 to 2.9% in 2016. Interest rate spread has remained under 0.5 percentage points for the entire reference period and has averaged 0.1 percentage points since 2011.

The share of SME non-performing loans decreased for the fourth year in a row, although it remains slightly higher than the share of non-performing loans for all businesses.

Venture capital and growth investments have increased by 24.3% in 2016, although venture capital investments fell by close to a quarter and this growth was mainly driven by a substantial increase in growth capital. Venture capital investments have not fully recovered from the financial crisis and are far below their pre-crisis high.

In 2016, SME interest rates decreased for the fourth year in a row. Since its peak in 2008, it has decreased by 251 basis points from 5.4% in 2008 to 2.9% in 2016. Interest rates for large enterprises followed a similar pattern and stood at 2.8% in 2016. Interest rate spread has remained under 0.5 percentage points for the entire reference period and has averaged 0.1 percentage points since 2011.

There exist multiple instruments supporting SME financing in Poland, both at the national and at the regional level. Under the De Minimis Guarantee Scheme, SMEs can obtain loan guarantee covering up to 60% of loan amount and amounting up to PLN 3.5 million. Since its launch in 2013, over 200 000 SME entrepreneurs have been granted with a guarantee under this scheme, with almost 48 000 guarantees awarded thus far.

Guarantees and other forms of financial support for SMEs are offered also under European Union (EU) cohesion funds as well as other EU programmes (e.g. Programme for the Competitiveness of Enterprises and small and medium-sized enterprises - COSME, Programme for Employment and Social Innovation - EaSI).

In 2016, the Ministry of Economic Development in cooperation with the Polish Development Fund launched the Start in Poland initiative with a budget of PLN 2.8 billion to accelerate equity funding for Polish start-ups.

Table 3.30. Scoreboard for Poland

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	PLN million	..	125 307	127 222	126 999	159 021	164 806	163 926	175 631	185 783	193 635
Outstanding business loans, total	PLN million	..	233 280	222 080	219 688	264 513	272 247	277 964	300 919	327 265	344 932
Share of SME outstanding loans	% of total outstanding business loans	..	53.72	57.29	57.81	60.12	60.54	58.97	58.36	56.77	56.14
Short-term loans, SMEs	PLN million	..	31 926	31 246	31 521	38445 189	39 883	37 369	40 460	41 602	42 809
Long-term loans, SMEs	PLN million	..	90 179	93 244	93 726	116220 355	122 232	123 427	130 255	138 331	145 052
Share of short-term SME lending	% of total SME lending	..	26.15	25.10	25.17	24.86	24.60	23.24	23.70	23.12	22.79
Government loan guarantees, SMEs	PLN million	..	..	..	..	..	..	7 004	9 654	8 895	9 360
Government guaranteed loans, SMEs	PLN million	..	..	..	..	..	..	12 244	17 428	15 857	16 435
Non-performing loans, total	% of all business loans	..	6.50	11.58	12.40	10.37	11.78	11.61	11.33	10.31	9.11
Non-performing loans, SMEs	% of all SME loans	..	7.46	13.35	14.59	12.33	13.06	12.99	12.75	12.29	10.97
Interest rate, SMEs	%	..	5.37	3.82	4.31	4.57	4.86	3.85	3.52	3.00	2.86
Interest rate, large firms	%	..	5.62	4.28	4.00	4.45	4.74	3.83	3.40	2.90	2.77
Interest rate spread	% points	..	- 0.25	- 0.46	0.31	0.12	0.12	0.02	0.12	0.10	0.09
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	..	..	..	..	..	..	38.92
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	..	..	..	..	..	78.55
Rejection rate	1-(SME loans authorised/ req.)	..	..	..	..	..	..	..	..	..	37.20
Utilisation rate	SME loans used/ authorised	..	..	..	..	..	..	..	..	..	66.44
Non-bank finance
Venture and growth capital	EUR thousand	141 023	96 717	70 667	112 670	197 491	125 315	219 057	94 298	108 258	134 515
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	- 31.42	- 26.93	59.44	75.28	- 36.55	74.80	- 56.95	14.80	24.25
Leasing and hire purchases	PLN million	27 112	24 092	28 900	21 432	27 794	26 905	30 419	34 287	37 826	..
Factoring and invoice discounting	PLN million	30 172	45 506	51 352	88 614	94 862	113 060	132 424	152 681	165 290	192 738

Source: See Table 30.5 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-42-en

Portugal

In 2015, SMEs comprised 99.7% of enterprises in Portugal and employed 78.8% of the labour force.

In 2016, the global stock of business loans decreased by 1.2% year-on-year, slightly below the decrease in SME lending which stood at 1.3%. This continues the declining trend in both categories since 2010, although it is less pronounced than in 2015, which saw a drop in total outstanding business loans by 8.4% and in SME loans by 9.1%. The share of SME loans in total business loans remained slightly above the 81% level and has remained roughly constant for the past decade.

The decline in SME lending was more pronounced in short-term SME loans, having dropped by 66.0% over 2009-16. Short-term SME loans did, however, register an increase of 6% in 2016 compared to 2015, whereas long-term SME loans decreased by only 2.2% year-on-year.

The share of government guaranteed loans in total SME loans grew significantly, from 5.4% in 2009 to 9.0% in 2016, demonstrating sustained public efforts to support SME access to finance.

The average interest rate for SME loans decreased to 3.8% in 2016, marking the fourth year in a row where this value was in decline, after having peaked at 7.6% in 2008 and again in 2012. The interest rate spread between SMEs and large firms also followed a similar trend, decreasing from 2.2% in 2012 to 1.1% in 2016, indicating an improvement in SME financing conditions.

The global amount of venture capital invested in SMEs fell significantly in 2010-11, from EUR 65.4 million to EUR 12.8 million. However, since then, there have been signs of recovery, with total venture capital investments in 2015 standing at over four times their 2011 value. This growth was not sustained into 2016, which saw venture capital fall steeply again by 78.4% to reach EUR 15.1 million.

Payment delays halved from 40 days in 2012, to 20 days in 2016 with a steady year-on-year decrease.

In 2009-12, year-on-year growth in the number of bankruptcies remained high, but started declining from 2012-16 except for a small increase in 2015. It went from 6 688 in 2012 to 3 616 in 2016, a cumulative reduction of 45.9%.

SME access to finance has been a major priority for the government. In this context, several “SME Invest / Growth and Capitalizar” credit lines were launched to facilitate SME access to credit. These credit lines have a total stock of bank credit of EUR 16.9 billion and long-term maturities up to seven years. They also offer preferential conditions, partially subsidised interest rates and risk-sharing public guarantees, which cover between 50% and 75% of the loan. These credit lines aim to support fixed investment as well as SME working capital.

In 2016, over 60 new measures that aim to assess the constraints that limit firms' access to financing and equity instruments were introduced through Program Capitalizar.

Table 3.31. Scoreboard for Portugal

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	83 829	91 720	92 274	90 843	87 038	79 814	73 586	70 914	64 429	63 572
Outstanding business loans, total	EUR million	102 018	112 449	113 973	111 532	107 282	98 846	91 832	86 282	79 032	78 050
Share of SME outstanding loans	% of total outstanding business loans	82.17	81.57	80.96	81.45	81.13	80.75	80.13	82.19	81.52	81.45
New business lending, total	EUR million	64 265	61 787	46 288	45 558	44 984	45 562	49 108	41 230	33 813	29 836
New business lending, SMEs	EUR million	28 852	26 431	23 128	8 984	14 229	12 539	11 866	11 871	11 901	11 302
Share of new SME lending	% of total new lending	44.90	42.78	49.97	19.72	31.63	27.52	24.16	28.79	35.20	37.88
Outstanding short-term loans, SMEs	EUR million	..	..	28 890	26 710	23 788	16 732	14 217	11 379	9 252	9 811
Outstanding long-term loans, SMEs?	EUR million	..	..	58 817	59 213	56 127	53 242	47 763	47 251	43 363	42 417
Share of short-term SME lending	% of total SME lending	..	..	32.94	31.09	29.77	23.91	22.94	19.41	17.59	18.79
Government guaranteed loans, SMEs	EUR million	..	..	4 961	6 825	6 147	5 698	5 802	5 461	5 595	5 712
Non-performing loans, total	% of all business loans	1.83	2.44	4.22	4.59	6.94	10.54	13.46	15.05	15.91	15.76
Non-performing loans, SMEs	% of all SME loans	4.14	4.38	4.95	5.41	8.18	12.33	15.77	17.32	18.34	17.84
Interest rate, SMEs	%	7.05	7.64	5.71	6.16	7.41	7.59	6.82	5.97	4.60	3.83
Interest rate, large firms	%	5.29	5.92	3.84	3.91	5.40	5.43	4.97	4.37	3.25	2.69
Interest rate spread	% points	1.76	1.72	1.87	2.25	2.01	2.16	1.85	1.60	1.35	1.14
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	85.95	86.30	85.16	84.76	83.42	84.88	84.03	84.01
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	24.50	30.09	26.27	23.68	23.45	18.31	22.96	24.21
Rejection rate	1-(SME loans authorised/ requested)	..	..	15.54	5.97	14.66	11.35	12.20	7.26	8.73	5.44
Non-bank finance
Venture and growth capital	EUR million	137.10	92.10	42.20	65.40	12.80	17.40	28.60	47.10	69.80	15.10
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-32.82	-54.18	54.98	-80.43	35.94	64.37	64.69	48.20	-78.37
Leasing and hire purchases	EUR million	..	..	5 324	5 242	3 442	3 037	2 666	2 425	2 329	2 296
Factoring and invoice discounting	EUR million	..	..	621	733	402	338	376	476	542	441
Other indicators
Payment delays, B2B	Number of days	39.9	33.0	35.0	37.0	41.0	40.0	35.0	33.0	21.0	20.0
Bankruptcies, SMEs	Number	2 612	3 528	3 815	4 091	4 746	6 688	6 030	4 019	4 714	3 616
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	35.07	8.13	7.23	16.01	40.92	-9.84	-33.35	17.29	-23.29

Source: See Table 31.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-43-en

Russian Federation

SMEs in the Russian Federation are defined differently than in EU countries, hindering international comparisons. There are more than 6.2 million micro, small, and medium-sized enterprises in Russia.

SMEs contribute to about 20% of GDP, employing around 30% of the workforce. According to the Russian Federation’s State Strategy of SME Development, approved in 2016, the SME sector would generate 40% of Russia’s GDP by 2030.

New SME loans doubled between 2008 and 2013, but in 2014 this upward trend reversed, and the amount of new SME loans decreased. In 2015, there was a dramatic drop in the amount of new SME loans, with an observed decline of 28.3%. In 2016, the downward trend continued, albeit at a slower pace of 2.8%. Only about half of Russian SMEs have ever applied for a loan.

Lending conditions loosened considerably in 2014-15, but this trend reversed in 2016, when interest rates sharply decreased as a result of a decline in the level of inflation, and the launch of state programmes of preferential lending for SMEs.

The interest rate spread between loans charged to SMEs and to all non-financial enterprises also increased in 2015 and reduced in 2016.

Non-performing loans (NPLs) for SMEs almost doubled between 2014 and 2015, making up 13.6% of all SME loans in 2015. In 2016, this rose to a peak of 14.2% for the entire reference period, but in 2017, the share of NPLs among SME loans is expected to decline.

In contrast to most Scoreboard countries, venture capital activities have been on the increase between 2008 and 2014, with investments doubling over this period. Venture capital investments declined in 2015-16, however, as some foreign investors left the Russian market.

Since 2005, the Ministry for Economic Development of Russia has been implementing the State SME Support Program. For the period from 2009 to 2017, the volume of support provided amounted to RUB 154.7 billion. Since 2016, it was stipulated that at least 10% of the programme should be sent to support SMEs in single-industry cities.

In 2015 the Federal Corporation on SME Development was established. The corporation, together with its subsidiary SME Bank, and regional guarantee organisations provided guarantees for RUR 192 billion in 2016.

In 2016, the Bank of Russia increased the lending programme for SME support. Under this programme, the Bank of Russia refinances the largest federal banks under the guarantee of the Corporation for SME lending at low rates.

In the second half of 2017, a new state support programme was launched, under which interest rates on commercial bank loans to SME entities are subsidised. To improve SMEs’ access to large firms’ purchases, the government of the Russian Federation set a quota of 18% for SMEs during the procurement of large companies.

Table 3.32. Scoreboard for the Russian Federation

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	RUB billion	..	2 523	2 648	3 228	3 843	4 494	5 161	5 117	4 885	4 469
Outstanding business loans, total	RUB billion	..	12 997	12 412	13 597	17 061	19 580	22 242	27 785	29 885	28 204
Share of SME outstanding loans	% of total outstanding business loans	..	19.41	21.33	23.74	22.53	22.95	23.20	18.42	16.35	15.84
New business lending, total	RUB billion	..	..	18 978	20 662	28 412	30 255	36 225	38 530	34 236	35 580
New business lending, SMEs	RUB billion	..	4 089	3 003	4 705	6 056	6 943	8 065	7 611	5 460	5 303
Share of new SME lending	% of total new lending	..	..	15.82	22.77	21.31	22.95	22.26	19.75	15.95	14.90
Government loan guarantees, SMEs	RUB billion	..	..	..	..	24.00	28.00	30.00	22.00	..	100.10
Government guaranteed loans, SMEs	RUB billion	..	..	..	..	51.00	62.00	65.00	48.00	..	192.00
Non-performing loans, total (amount)	RUB billion	..	..	723	738	734	895	958	1 276	1 677	1 948
Non-performing loans, total	% of all business loans	..	..	5.83	5.43	4.30	4.57	4.31	4.59	5.61	6.91
Non-performing loans, SMEs (amount)	RUB billion	..	74	200	284	315	377	365	394	666	636
Non-performing loans, SMEs	% of all SME loans	..	2.93	7.56	8.80	8.19	8.39	7.08	7.71	13.64	14.23
Interest rate, SMEs	%	..	..	..	..	..	..	..	16.09	16.44	13.03
Interest rate, large firms	%	..	..	..	..	..	..	..	12.94	12.95	11.07
Interest rate spread	% points								3.15	3.49	1.96
Outstanding business loans, SMEs	RUB billion	..	2 523	2 648	3 228	3 843	4 494	5 161	5 117	4 885	4 469
Non-bank finance
Venture and growth capital	USD billion	10.25	14.33	15.19	16.79	20.09	21.13	26.25	26.11	22.50	19.92
Venture and growth capital (growth rate)	%, year-on-year growth rate		39.7%	6.0%	10.5%	19.7%	5.2%	24.2%	-0.5%	-13.8%	-11.5%
Other indicators
Bankruptcies, total	Number	..	13 916	15 473	16 009	12 794	14 072	13 144	14 500	14 624	..
Bankruptcies, total (growth rate)	%, year-on-year growth rate			11.19	3.46	-20.08	9.99	-6.59	10.32	0.86	..

Source: See Table 32.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-44-en

Serbia

The Serbian economy is dominated by SMEs as they constitute 99.8% of all enterprises in the country. In 2015, SMEs employed more than 65% of the labour force and accounted for about 58% of total gross value added. In addition, they contributed to approximately 44% of total exports, even though only 4.4% of SMEs were involved in export activities in 2015.

The Serbian economy experienced two waves wherein the volume of SME loans was on the rise, in 2007-11 and 2014-16. In the latter period, both outstanding stock of SME loans and SME loan share of all business loans increased. At the same time, there was an overall improvement in the SME business environment in Serbia. This was also recognised by the World Bank in their “Doing Business List”, where Serbia jumped seven positions to rank 47th out of 190 countries.

Total outstanding business loans declined slightly from 2015 to 2016, in part due to the NPL Resolution Strategy, which included provisions to resolve non-performing loans either by write-offs or by sales to the non-banking sector, thus removing them from banks’ financial statements.

During 2016, only 16.5% of SMEs requested bank financing, and long-term loans continue to constitute the predominant component of SME loans, with their share rising to 75.2% in 2016. Credit conditions continue to improve for SMEs in Serbia. Interest rates for loans extended in or linked to foreign currency, around 65.6% of SMEs loans in 2016, more than halved from 10.7% in 2007 to 5.0% in 2016. Although it continues to be higher than the interest rate charged to large enterprises, the interest rate spread in 2016 has narrowed to 189 basis points. Collateral was required from 40.9% of SMEs applying for bank financing in 2016, still high albeit a decline of 8.1 percentage points from 2015.

Alternative sources of financing such as venture capital, business angels, micro financing, leasing and factoring, etc. suffer from a lack of regulation in Serbia. Sporadic investments from foreign venture capital funds are observed and the West Balkans Enterprise Development & Innovation Facility programme (WB EDIF), dominantly financed by the European Commission, is important to the progress of this industry.

The successful implementation of the NPL Resolution Strategy can best be seen from the decline in percentage of non-performing SME loans by 7.9 percentage points from 2013 to 2016. This allowed for relaxation of credit conditions to SMEs and new lending in the observed year.

The government of Serbia has officially adopted the “Year of Entrepreneurship 2016” programme, aiming to boost the strategy implementation and to support growth and development of entrepreneurship in Serbia through 33 assistance programmes. The total annual allocated budget for financial support programmes for SME’s and entrepreneurship growth and development in 2016 is RSD 15 286 million (approx. EUR 124 million).

Table 3.33. Scoreboard for Serbia

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR million	2 858	3 994	3 966	4 202	4 320	4 352	4 061	4 779	5 332	5 529
Outstanding business loans, total	EUR million	13 598	19 044	19 268	19 777	20 028	20 460	19 154	18 724	18 681	18 352
Share of SME outstanding loans	% of total outstanding business loans	21.02	20.97	20.58	21.25	21.57	21.27	21.20	25.52	28.54	30.13
New business lending, total	EUR million	..	..	..	..	8 862	9 043	7 093	6 765	8 463	10 087
New business lending, SMEs	EUR million	2 027	3 409	3 015	3 190	3 323	2 771	2 302	2 717	3 308	4 010
Share of new SME lending	% of total new lending	..	..	..	..	37.49	30.64	32.45	40.16	39.09	39.75
Short-term loans, SMEs	EUR million	1 000	1 265	1 356	1 436	1 308	1 257	1 386	1 405	1 338	1 372
Long-term loans, SMEs	EUR million	1 858	2 729	2 610	2 766	3 012	3 096	2 675	3 374	3 995	4 156
Share of short-term SME lending	% of total SME lending	34.98	31.67	34.20	34.17	30.28	28.87	34.13	29.40	25.09	24.82
Government guaranteed loans, SMEs	EUR million	0.25	0.19	297.90	522.71	390.28	568.94	341.66	750.04	126.31	13.09
Non-performing loans, total	% of all business loans	..	14.56	19.84	20.70	22.33	19.19	24.52	24.64	21.71	17.00
Non-performing loans, SMEs	% of all SME loans	6.72	10.56	18.86	21.00	22.64	26.15	28.05	27.08	26.55	20.12
Interest rate, SMEs	%	10.69	10.90	10.57	10.06	9.72	8.15	8.03	7.25	6.12	5.01
Interest rate, large firms	%	6.32	8.04	7.23	7.36	7.88	6.60	6.34	5.18	3.33	3.12
Interest rate spread	% points	4.37	2.85	3.35	2.70	1.85	1.55	1.70	2.07	2.79	1.89
Collateral, SMEs	% of SMEs needing coll to obtain bank loans	31.62	38.78	43.14	44.51	45.59	53.00	55.06	53.13	48.98	40.89
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	..	..	..	..	14.94	16.46
Rejection rate	1-(SME loans authorised/ req.)	18.66	17.25	28.42	27.13	15.77	32.02	32.18	25.15	24.27	28.08
Utilisation rate	SME loans used/ authorised	71.75	81.66	88.20	67.76	83.83	86.11	87.92	86.47	87.76	87.98
Other indicators
Payment delays, B2B	Number of days	..	..	33	31	35	28	28	..	..	..
Bankruptcies, SMEs	%	12	..	13	15	15	13	12	..	..	..
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	..	..	14.17	5.52	-17.65	-4.76	..	..	..

Note: There is a break in the time series for Outstanding SMEs loans, total, in 2012, when an additional bank was added to the data, contributing to the increase in volume.

Source: See Table 33.3 of the full country profile.

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Slovak Republic

SMEs continue to dominate the Slovak economy, comprising 99.5 % of the enterprise population with a minimum of one employee in 2016. However, the total number of SMEs declined slightly by 2.3% compared to 2015.

Total SME lending has been on an upward trend since 2012. New SME loans increased by 1.5% in 2016, significant in light of the extensive decline in total new business lending, which was down by 26.4% in the same year. The distribution of this new SME lending has been slightly in favour of long-term loans.

Interest rates on SME loans fell from 3.8% in 2012 to 3.1% in 2016. This improvement in SMEs’ access to credit financing indicates a gradual and steady trend of loosening of credit conditions.

The volume of venture and growth capital reached EUR 16.3 million in 2016, up 28.2% from 2015. This represents a slight decrease in the growth dynamics of venture and growth capital investment, from 2015’s growth rate of 41.7%. Both, the magnitude of growth as well as the share it represents on total SME external financing, are remarkable.

Average business to business (B2B) payment delays decreased on a year-on-year basis to 19 days in 2016 from what represented a spike of 24 days in 2015. The share of non-performing SME loans on all SME loans in 2016 was higher (8.1%) compared to the share of non-performing loans in general (6.5%).

SME bankruptcies dominated the total bankruptcies statistics in 2016 (99.6%) with 273 SMEs having gone bankrupt. However, the number of SMEs bankruptcies continues to decline for the second year in a row, although it continues to be higher than it was in 2008.

Government policies in the Slovak Republic aimed at improving access of SMEs to financing. They included the provision of loans and guarantees for SMEs by specialised state banks and the Slovak Business Agency (SBA) as well as financing instruments targeted at SMEs within the implementation of JEREMIE initiative in 2014.

Table 3.34. Scoreboard for the Slovak Republic

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs1	EUR million	9 136	12 092	12 032	12 046	10 600	11 038	10 734	11 902	13 170	14 729
Outstanding business loans, SMEs2	EUR million	..	..	..	..	..	5 893	6 704	6 946	7 350	8 660
Outstanding business loans, total	EUR million	13 906	15 679	15 156	15 174	16 117	15 523	15 102	14 837	16 119	16 943
Share of SME outstanding loans1	% of total outstanding business loans	65.70	77.12	79.39	79.39	65.77	71.11	71.07	80.22	81.70	86.93
New business lending, total	EUR million	8 493	9 437	7 559	9 124	10 689	11 686	11 876	12 495	11 783	8 671
New business lending, SMEs2	EUR million	..	..	..	..	..	2 361	2 632	2 603	3 087	3 134
Share of new SME lending	% of total new lending	..	..	..	..	..	20.20	22.16	20.83	26.20	36.14
Short-term loans, SMEs	EUR million	4 609	4 797	4 981	4 987	4 188	4 481	4 532	5 385	5 766	6 277
Long-term loans, SMEs	EUR million	4 527	7 295	7 051	7 059	6 412	6 557	6 202	6 517	7 404	8 453
Share of short-term SME lending	% of total SME lending	50.45	39.67	41.40	41.40	39.51	40.60	42.22	45.24	43.78	42.61
Government loan guarantees, SMEs	EUR million	82	99	81	70	84	87	38	26	60	46
Government guaranteed loans, SMEs	EUR million	115	157	143	139	167	136	157	186	244	184
Direct government loans, SMEs	EUR million	117	160	139	146	168	209	152	159	172	177
Non-performing loans, total	% of all business loans	..	..	6.80	8.40	8.30	7.90	8.30	8.60	7.40	6.50
Non-performing loans, SMEs2	% of all SME loans	..	..	..	..	..	10.40	9.90	10.30	9.00	8.10
Interest rate, SMEs	%	5.50	4.60	3.00	3.20	3.20	3.80	3.60	3.80	3.40	3.10
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	100	100	100	100	100	100	100	100	100	100
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	17	..	16	..	23	18
Rejection rate	1-(SME loans authorised/ requested)	..	..	..	..	20	..	15	..	13	5
Non-bank finance
Venture and growth capital	EUR million	7.00	8.00	14.40	11.40	11.50	7.00	9.00	8.97	10,39	17.03
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	14.29	80.00	-20.83	0.88	-39.13	28.57	-0.33	41.69	28.25
Other indicators
Payment delays, B2B	Number of days	20	8	13	17	20	21	19	17	24	19
Bankruptcies, SMEs	Number	169	251	276	344	363	339	377	409	350	273
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	48.52	9.96	24.64	5.52	-6.61	11.21	8.49	-14.43	-22.00

1. SME loans classified according to the national/ EU definition of SMEs.

2. No EU definition used - SME loans classified based on banking standards.

Source: See Table 34.4 of the full country profile.

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Slovenia

In 2015, 99.6% of all firms in Slovenia were SMEs and 89.1% of firms employed less than 10 employees.

While SME lending increased between 2007 and 2011, it more than halved between 2011 and 2016, decreasing from EUR 9.8 billion in 2011 to EUR 4.4 billion in 2016. Over this period, short-term SME lending declined more than long-term SME lending; short term SME loans accounted for 32% of SME loans in 2011, compared to 18% in 2016.

It is estimated that real GDP decreased by more than 9% between 2008 and 2013 (European Commission, 2015). Although growth figures were positive since 2014 and are estimated to reach 3.8% in 2017, credit lending, especially to SMEs, continued to drop in 2016 and was at 31% of its 2011 volume.

Interest rates for SMEs declined in recent years from 6.33% in 2011 to 3.6% in 2016 for new loans below EUR 1 million, and from 5.9% in 2011 to 3.4% in 2016 for long-term loans. The interest rate spread between bank loans to large enterprises and to SMEs for short-term lending rose in recent years, from -0.07 percentage points in 2011 to 0.56 percentage points in 2016.

Government loan guarantees have been fluctuating lot in the period 2007-16. At EUR 3 million in 2007, they were around EUR 1 billion in 2013, before decreasing to EUR 552 million in 2014 and then to zero in 2015. In 2016, government loan guarantees climbed back to EUR 520 million.

Direct loans are mostly provided by the Slovenian Investment and Development Bank (SID) and also public funds such as the Slovene Enterprise Fund (SEF), the Slovenian Regional Development Fund and the Housing Fund. Government direct loans to SMEs declined by almost half between 2007 and 2010. The Ministry of the Economic Development and Technology provides guarantees for bank loans with subsidies of interest rate through the SEF.

Table 3.35. Scoreboard for Slovenia

Indicator	Units	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Total Business Loans	EUR million	16 796	19 937	19 863	20 828	20 090	18 643	14 135	11 213	10 040	9 306
SME Short-Term Loans	EUR million	2 088	2 532	2 149	2 760	3 090	3 191	1 738	786	605	778
SME Long-Term Loans	EUR million	5 209	5 585	5 714	6 911	6 703	6 343	3 957	3 528	3 512	3 577
SME Business Loans	EUR million	7 297	8 117	7 863	9 671	9 794	9 534	5 695	4 314	4 118	4 355
SME Short-Term Lending	Share of SME lending (%)	28.62	31.19	27.33	28.54	31.55	33.47	30.51	18.22	14.7	17.87
SME loans	% of business loans	43.45	40.71	39.59	46.43	48.75	51.14	40.29	38.47	41.01	46.79
Interest rate SME, new loans < EUR 1 million (%)	%	6.03	6.78	6.29	6.12	6.33	6.25	6.24	5.75	4.40	3.57
Interest rate SME, new loans >= EUR 1 million (%)	%	5.64	6.51	5.95	5.92	5.90	5.38	5.36	4.88	3.75	3.35
Interest rate LE, new loans < EUR 1 million (%)	%	5.72	6.47	6.07	6.1	6.39	6.12	5.97	4.91	3.57	3.02
Interest rate LE, new loans >= EUR 1 million (%)	%	5.04	6.13	5.58	5	4.63	4.63	4.49	3.75	2.68	0.65
Interest rate spread SME (between interest rate for loans of < 1 million and of >= 1million	Percentage points	0.39	0.27	0.35	0.2	0.42	0.88	0.87	0.87	0.65	0.23
Interest rate spread LE (between interest rate for loans of < 1 million and of >= 1million	Percentage points	0.68	0.34	0.49	1.1	1.76	1.49	1.47	1.17	0.89	2.37
Interest rate spread between SME and LE (< 1 million)	Percentage points	0.31	0.31	0.22	0.02	-0.07	0.14	0.27	0.83	0.83	0.56
Interest rate spread between SME and LE (>= 1 million)	Percentage points	0.6	0.37	0.36	0.92	1.27	0.74	0.87	1.13	1.08	2.70

Source: See Table 35.3 of full country profile.

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South Africa

Although estimates vary, the number of small, micro, and medium enterprises (SMME) in South Africa rose by 3%, from 2.18 million in the first quarter of 2008 to 2.25 million in the second quarter of 2015, (Bureau for Economic Research (BER), 2016). Of the 2.25 million SMEs, 1.5 million were informal, concentrated in the trade (wholesale and retail) and accommodation sector.

Small businesses have only a 37% chance of surviving the first four years and only a 9% chance of surviving the first ten, illustrating that scaling up represents a crucial challenge to many South African SMEs which is in turn, at least in part, related to difficulties in attracting external sources of finance.

According to the South African Reserve Bank data on bank statistics, total SMME credit exposure to banks was ZAR 639 billion at the end of 2016, which accounts for 27% of total business loans. As indicated below, the low level of SMME financing appears to be emanating from the demand side as the vast majority of SMMEs indicate that they do not borrow from financial institutions, banks in particular.

The capital of the business owner represents, by far, the most widely used source of finance, followed by investments by family and business partners.

SMMEs non-performing loans in the banking sector have declined since 2010, falling from 5.2% to 2.5% in 2016. The economic recovery from the 2009 recession has likely contributed to the improvement. At 2.55% in 2016, the ratio of non-performing loans of SMMEs remains one percentage point higher than that of total corporates, which was 1.5%.

Government funding for SMMEs is provided through grants and financing by development finance institutions (DFIs). The outstanding direct government loans to SMEs at the end of 2016 amount to ZAR 8 722 million, which accounts for 1.4% of all SME loans.

Credit guarantees are also in use in South Africa. ZAR 234 million was provided in 2016 by the IDC up from ZAR 211 million in 2015, after having declined significantly in 2013 and in 2014.

The South African Government is also working on the establishment of a registry for movable assets and of a database with credit information. Both initiatives aim to make lending less risky and should therefore make bank financing more widely available.

Table 3.36. Scoreboard for South Africa

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	ZAR million	..	423 691	411 212	388 090	411 280	454 012	512 504	545 271	579 823	638 525
Outstanding business loans, total	ZAR million	..	1 441 480	1 276 048	1 373 082	1 481 447	1 647 708	1 791 195	1 965 051	2 323 080	2 376 542
Share of SME outstanding loans	% of total outstanding business loans	..	29.39	32.23	28.26	27.76	27.55	28.61	27.75	24.96	26.87
Government loan guarantees, SMEs	ZAR million	8	99	226	201	439	227	105	105	223	243
Direct government loans, SMEs	ZAR million	3 626	4 829	4 909	5 915	6 900	6 964	6 733	8 106	9 589	9 767
Non-performing loans, total	% of all business loans	..	1.40	2.96	2.91	2.11	1.97	1.84	1.54	1.64	1.48
Non-performing loans, SMEs	% of all SME loans	..	2.89	5.23	5.20	4.07	3.36	2.92	2.94	2.51	2.55
Non-bank finance
Venture and growth capital	ZAR million	468	551	242	194	211	288	183	273	372	872
Venture and growth capital (growth rate)	%, Year-on-year growth rate		17.735	-56.08	-19.83	8.76	36.49	-36.46	49.18	36.26	134.41
Other indicators
Bankruptcies, total	Number	3 151	3 300	4 133	3 992	3 559	2 716	2 374	2 064	1 962	1 934
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	4.73	25.24	-3.41	-10.85	-23.69	-12.59	-13.06	-4.94	-1.43

Source: See Table 36.2 of the full country profile.

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Spain

99.7% of all non-financial corporations (NFCs) in Spain in December 2015 were SMEs, employing 63.8% of the business labour force. Of these, micro-enterprises dominated with a share of 90.4% of all enterprises.

The Spanish economy continued to grow at a high rate in 2016. GDP grew by 3.2%, the same rate as in 2015, and the pre-crisis level of activity is expected to be regained in the second quarter of 2017. Growth in employment brought the unemployment rate down to 18.6%, from 20.9% at the end of 2015. Spain continued to maintain a high level of net lending to the rest of the world, which amounted to 2.0% of GDP.

SME lending contracted dramatically after the financial crisis. The recovery of activity and business performance of non-financial corporations in general, and of SMEs in particular, which began to take hold in 2014, continued into 2015 and 2016, as did the improvement in their financing conditions.

Short-term loans continue to grow as a percentage of total loans. In the case of SMEs, at end-2016, 90.0% of lending was short term, which is a higher share than for large corporations and implies that SMEs are more dependent on credit institutions in the refinancing process than large enterprises.

As regards SME credit conditions, the trend of declining interest rates and interest rate spreads, along with a stabilisation of credit conditions, initiated in 2012, continued. The interest rate spreads between loans to SMEs and large corporates also continued to narrow over the same period, progressively falling from the peak 230 basis points (bp) in 2012 to 88 bp in 2016.

By contrast, a slight downtrend was apparent in government assistance over the last three years. General government financing to non-financial corporations, preferentially SMEs, showed a very moderate decrease. This was, however, compatible with a greater availability of liquid funds and easier credit conditions from private-sector banks, so that SMEs found it easier to access private credit rather than public financing.

The economic recovery and the higher demand, along with improved credit conditions, were also evidenced in lower company mortality. This was also favoured by various insolvency legislation reforms that have stimulated agreements between creditors and the business continuity.

The latest available information on venture capital investments which relates to 2016 indicates equity financing and the related investments with respect to the seed, start-up and expansion stages in that year (EUR 1 148 million) increased by 3.2% vis-à-vis 2014.

Table 3.37. Scoreboard for Spain

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	EUR billion	..	..	..	..	..	..	..	293	258	247
Outstanding business loans, total	EUR billion	893	952	915	896	840	708	609	545	518	493
Share of SME outstanding loans	% of total outstanding business loans	..	..	..	..	..	..	..	53.79	49.85	50.10
New business lending, total	EUR billion	991	929	868	665	527	485	393	357	393	323
New business lending, SMEs	EUR billion	394	357	263	210	174	146	134	147	165	170
Share of new SME lending	% of total new lending	39.76	38.43	30.30	31.58	33.02	30.10	34.10	41.18	41.98	52.63
Short-term loans, SMEs	EUR billion	379	346	246	196	166	139	126	135	154	153
Long-term loans, SMEs	EUR billion	15	11	17	14	8	7	9	11	12	17
Share of short-term SME lending	% of total SME lending	96.19	96.92	93.54	93.33	95.40	95.21	93.33	92.47	92.77	90.00
Government loan guarantees, SMEs	EUR million	5 550	7 700	11 000	10 100	12 000	11 000	13 000	9 100	7 600	6 500
Government guaranteed loans, SMEs	EUR million	5 210	7 053	5 906	7 236	7 502	4 974	2 064	938	273	109
Direct government loans, SMEs	EUR million	10 103	12 384	19 916	23 740	26 221	23 599	23 648	22 588	21 537	20 860
Non-performing loans, total	% of all business loans	0.74	3.67	6.25	8.09	11.64	16.06	12.08	11.38	9.40	..
Non-performing loans, SMEs	% of all SME loans	..	..	..	..	..	..	..	..	..	..
Interest rate, SMEs	%	5.96	5.51	3.63	3.78	4.95	4.91	4.79	3.86	3.01	2.44
Interest rate, large firms	%	5.33	4.30	2.16	2.57	3.36	2.61	2.69	1.99	1.97	1.56
Interest rate spread	% points	0.63	1.21	1.47	1.21	1.59	2.30	2.10	1.87	1.04	0.88
Collateral, SMEs	% of SMEs needing coll. for bank loans	..	..	..	35.19	34.36	31.45	30.00	31.22	28.24	25.89
Percentage of SME loan applications	SME loan applications/total number of SMEs	..	..	38.07	36.25	34.67	31.89	31.49	34.36	33.81	32.80
Rejection rate	1-(SME loans authorised/req.)	..	..	22.74	15.87	12.83	18.47	12.85	9.77	7.87	6.95
Non-bank finance
Venture and growth capital	EUR million	..	3 336	3 596	3 600	2 675	2 145	1 473	1 437	1 112	..
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	..	7.79	0.11	-25.69	-19.81	-31.33	-2.44	-22.62
Other indicators
Payment delays, B2B	Number of days	5	5	14	12	6	9	16	11	8	..
Bankruptcies, SMEs	Number	894	2 550	4 463	4 187	4 912	6 627	7 517	5 096	3 927	3 114
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	185.2	75.02	-6.18	17.32	34.91	13.43	-32.21	-22.94	-20.70

Source: See Table 37.3 of the full country profile.

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Sweden

Of all the limited liability companies with employees in Sweden, 99% are SMEs. They account for 60% of employment, and 47% of value added.

The stock of SME debt to banks and other financial institutions was SEK 1 073 billion in 2015, up by 7.0% in comparison to 2014. SME debt as a share of total outstanding debt was 37.0% in 2015, up by 1.3 percentage points compared to the previous year.

Surveys of bank managers’ views on business loan volumes indicate that loans to SMEs have been increasing since Q1 2012; this development corresponds with decreasing interest rates on bank loans over the period.

The Swedish Central Bank (Sw. Riksbanken) continuously increased the repo rate up until the eve of the financial crisis. The rate was increased to 4.8% just a week before the fall of Lehman Brothers in September 2008. As the crisis hit, the rate was lowered in steps until it reached a low of 0.25%. It stayed at this level for a year before the Central Bank started to increase the repo rate again towards the end of 2010. The repo rate reached 2.0% in mid-2011. Since then, it has only stagnated or lowered. In February 2015, the Central Bank introduced a negative policy rate of -0.1%. The rate has since decreased further and has been -0.5% since February 2016.

Private equity fund investments in Swedish companies in the venture and growth stages were EUR 268 million in 2016 according to preliminary data.

Almi’s lending increased by 3% from 2015 to SEK 3 324 million in 2016. The Swedish National Export Credits Guarantee Board issued guarantees for SEK 2.5 billion to SMEs in 2016, the same amount as last year.

As regards new policy developments in SME financing, the Swedish parliament (Riksdag) in June 2016 adopted a proposal concerning the structure of public financing for innovation and sustainable growth (the government’s bill 2015/16:110). One aim of this new structure is to clarify and simplify the current system of state venture capital (VC) financing. The new structure also aims to utilise public resources within the area better and thereby contribute to the development and renewal of the Swedish industry. The new structure means, among other things, that the government establishes a new, joint stock company, Saminvest AB, which will be a funder of funds, and invest in companies in the development stages through privately managed VC-funds. Saminvest AB is expected to begin its operations in 2017.

There is little hard data available on crowdfunding in Sweden as of right now. However, the government has commissioned a study to map and analyse the crowdfunding situation in Sweden.

Table 3.38. Scoreboard for Sweden

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	SEK billion	..	..	..	..	..	930	964	1 003	1 073	..
Outstanding business loans, total	SEK billion	..	..	..	..	..	2 683	2 722	2 812	2 901	..
Share of SME outstanding loans	% of total outstanding business loans	..	..	..	..	..	34.66	35.39	35.67	36.99	..
Short-term loans, SMEs	SEK billion	..	..	..	..	..	211	217	249	262	..
Long-term loans, SMEs	SEK billion	..	..	..	..	..	719	747	754	811	..
Share of short-term SME lending	% of total SME lending	..	..	..	..	..	22.71	22.50	24.83	24.44	..
Direct government loans, SMEs	SEK million	1 422	1 716	3 231	2 112	2 023	2 161	2 200	2 354	3 241	3 324
Non-performing loans, total	% of all business loans	0.08	0.46	0.83	0.78	0.65	0.70	0.61	1.24	1.17	1.10
Interest rate, SMEs	%	4.86	5.66	2.43	2.59	4.17	4.07	3.29	2.71	1.75	1.57
Interest rate, large firms	%	3.99	4.84	1.71	1.64	3.01	3.03	2.64	2.15	1.35	1.22
Interest rate spread	% points	0.87	0.82	0.72	0.95	1.16	1.04	0.65	0.56	0.40	0.35
Non-bank finance
Venture and growth capital	EUR thousand	566 802	594 787	424 894	652 421	433 535	335 681	367 505	386 390	287 189	267 558
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	4.94	-28.56	53.55	-33.55	-22.57	9.48	5.14	-25.67	-6.84
Other indicators
Payment delays, B2B	Number of days	..	..	..	..	..	20	24	15	9	9
Bankruptcies, SMEs	Number	5 791	6 298	7 638	7 274	6 958	7 471	7 701	7 158	6 433	6 019
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate	..	8.75	21.28	-4.77	-4.34	7.37	3.08	-7.05	-10.13	-6.44

Source: See Table 38.3 of the full country profile.

Statlink

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Switzerland

Only 0.8% of all Swiss enterprises are large and SMEs continue to dominate the enterprise landscape, constituting 99.2% of all firms.

Switzerland experienced a real GDP growth of 1.3% in 2016, increasing from 0.8% in 2015.

Total outstanding SME loans rose by 2.1% in 2016 to reach CHF 412.0 billion. This is an increased growth rate from the 0.3% observed in 2015.

Over the 2007-16 period, SME loans expanded by 27.5%, while overall corporate lending rose by 34.1%.

Lending standards slightly loosened in 2016, while the demand for credit decreased slightly.

The average interest rate charged to SMEs decreased in 2016 after the increases in 2014 and 2015 while the interest rate spread with large companies remained stable.

Venture and growth capital investments decreased slightly by 2.4% in 2016, after experiencing rapid growth of 55.7% the previous year.

Crowdfunding activities are increasing at a fast pace, despite the lack of specific crowdfunding legislation. Recently, the government has taken steps to make the regulatory framework friendlier to the industry, as well as to financial technology companies more generally.

Payment delays in the business to business sector have significantly decreased over the last few years, from 12 days in 2008 to 7 days in 2016, illustrating that liquidity problems have diminished.

In Switzerland, there are four guarantee cooperatives that help promising SMEs obtain bank loans of up to CHF 500 000. Loan guarantees increased steadily in the period 2007-10, declined slightly in 2011, and continued to grow in the following five years. The guarantee scheme was restructured in 2007, allowing it to cover more risks, which in turn results in an increase of volume since then. Currently the Federal Council is undergoing the amendment of the Federal Law on Financial Aid for guarantee organisations to allow guarantees up to CHF 1 million.

Table 3.39. Scoreboard for Switzerland

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	CHF billion	323	345	344	364	378	384	405	402	404	412
Outstanding business loans, total	CHF billion	402	426	433	459	481	489	514	527	525	539
Share of SME outstanding loans	% of total outstanding business loans	80.44	80.86	79.33	79.26	78.52	78.60	78.81	76.41	76.89	76.48
Government guaranteed loans, SMEs	CHF million	104	148	187	215	210	219	227	238	244	254
Interest rate, SMEs	%	..	..	2.21	2.11	2.08	2.01	1.99	2.05	2.07	2.04
Interest rate, large firms	%	..	..	1.35	1.23	1.16	1.11	1.16	1.16	1.30	1.25
Interest rate spread	% points			0.86	0.88	0.92	0.90	0.83	0.89	0.78	0.79
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	76.00	75.00	77.00	77.00	75.00	79.00	79.64	79.87
Utilisation rate	SME loans used/ authorised	71.00	70.00	71.00	70.00	69.00	71.00	72.00	72.00	71.76	71.66
Non-bank finance
Venture and growth capital	EUR million	320	301	308	330	228	246	226	235	365	357
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-5.9	2.5	7.0	-31.0	8.0	-8.0	3.9	55.6	-2.4
Payment delays, B2B	Number of days	..	12	13	13	11	10	9	9	7	7
Other indicators
Bankruptcies, total	Number	4 314	4 221	5 215	6 255	6 661	6 841	6 495	5 867	6 098	6 504
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	- 2.16	23.55	19.94	6.49	2.70	- 5.06	- 9.67	3.94	6.66

Source: See Table 39.4 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-51-en

Thailand

In 2015, there were approximately 2.77 million SMEs in Thailand, which constituted 99.72% of all enterprises. SMEs in Thailand accounted for 80.44% of overall private sector employment in the same year. Moreover, SMEs’ contribution to the country’s GDP was 41.1%.

The Small and Medium Enterprises Promotion Act B.E. 2543 categorised SMEs by the value of fixed asset (excluding land) and number of employees according to the benchmark defined by the Ministry of Industry.

SMEs are able to access financing through traditional bank loans. Loans to SMEs increased 68.77% over the 2007-16 period. In 2016, outstanding SME loans amounted to THB 3 989 billion, representing 49.45% of total outstanding business loans and a slight increase compared to 2015. Furthermore, SMEs are able to source funds from the capital market, venture capital, and crowdfunding.

Yet, some SMEs have collateral constraints and lack credit history, limiting their access to bank loans. Government policy responses have aim to tackle these issues. For example, the Thai Credit Guarantee Corporation (TCG) provides credit guarantees for viable SMEs to ensure that SMEs have access to bank loans and are not constrained by their lack of collateral. The Business Collateral Act B.E. 2558 (2015) simplified the process of security interest creation and expanded the types of collateral SMEs can register and use to secure loans. Moreover, various efforts have been to alleviate the problem of information asymmetry among SMEs. In conjunction to boosting SMEs financial access, the government has also launched capacity building programs to boost SMEs’ competitiveness.

Table 3.40. Scoreboard for Thailand

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Outstanding business loans, SMEs	THB Billion	2 365	2 410	2 222	2 376	2 743	3 084	3 513	3 710	3 918	3 989
Outstanding business loans, total	THB Billion	4 629	5 117	4 863	5 298	6 080	6 723	7 473	7 774	8 017	8 066
Share of SME outstanding loans	% of total outstanding business loans	51.06	47.09	45.70	44.85	45.11	45.87	47.00	47.73	48.87	49.45
Government loan guarantee, SMEs	THB Billion				73	113	180	244	270	309	331
Non-performing loans, total	% of all business loans	8.23	5.77	5.32	3.96	2.97	2.36	2.13	2.07	2.55	2.88
Non-performing loans, SMEs	% of all SME loans			7.11	5.38	3.97	3.46	3.29	3.11	3.5	4.35

Source: Bank of Thailand.

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The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-52-en

Turkey

SME lending grew steadily over the whole 2007-2016 period, with the exception of a minor decline of 1.6% in 2009. The growth rate in SME loans in 2016 stands at 8.2%. As business lending to firms of all sizes grew larger than the SME lending, the share of SME loans in the total business loans fell slightly.

Venture and private equity investments show an erratic pattern; between 2008 and 2011, investments increased by more than 600% for three consecutive years and peaked in 2011, and after that, a decline was observed until 2015, with an exception of a hike in 2013. In 2016, venture and private equity investments rose by nearly 150% to a level close to peak year 2011.

Non-performing loans (NPL) ratio for both business loans and SME loans was at its highest point in 2009 and declined afterwards. The fall in NPL ratio of SME lending was even sharper. However, in 2016 NPL ratio rose faster in SME loans than the business loans.

The number of bankruptcies increased from 108 firms in 2015 to 222 in 2016. Company closures, including sole proprietorships, totalled 41 897 enterprises in 2016, down from 56 684 enterprises in 2015, highlighting that bankruptcies (upon court verdict) constitute a relatively uncommon phenomenon in Turkey.

In 2012 the Turkish Government enacted law to stimulate the development of the business angel industry. Secondary legislation came into force in 2013. The purpose of law and secondary legislation is the establishment of a legal framework and the provision of generous tax incentives for licensed angel investors.

The government also introduced regulation regarding fund of funds, which enables Treasury to transfer capital to fund of funds under certain conditions.

KOSGEB constitutes the main body for executing SME policies in Turkey. It provides 11 different support programmes with considerable outreach throughout Turkey. The new initiatives to stimulate alternative sources of financing have been introduced in Turkey in 2016. These including KOBIGEL-SME Development Support Programme, which aims to increase the additional value and the competitiveness level of SMEs in the economy. Establishing the project development culture and awareness among SMEs, enhancing enterprises’ project developing capacity, increase the share and effectiveness of SMEs, increase the competitiveness of SMEs. KOSGEB provides grant and soft loan in this programme for the project costs in terms of the conditions in call for proposal. TEKNOPAZAR Technological Product Promotion and Marketing Support Programme, aims to provide support for the promotion and marketing of technologic products or prototypes of SMEs which are obtained as the result of R&D, innovation or design projects or which have Technologic Product Experience Document, in order to increase the international market competitive power of these enterprises and to provide them a more dynamic structure.

In 2016, Turkey passed a bill on movable collateral in commercial transactions. The goal of the reform is increasing to get finance against valuable tangible and intangibles assets such as receivables, machinery, inventory, stock which comprise the 78% of SMEs' total assets.

In addition to the above programmes, in 2016 KOSGEB initiated a programme in order to reimburse the collateral costs of the SMEs which are applied to the KOSGEB support programmes.

Table 3.41. Scoreboard for Turkey

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	TRY million	76 521	84 605	83 271	125 468	162 803	199 743	271 421	333 278	388 749	420 539
Outstanding business loans, total	TRY million	190 623	250 318	262 724	353 236	459 003	528 846	715 465	884 648	1 100 093	1 314 364
Share of SME outstanding loans	% of total outstanding business loans	40.14	33.8	31.7	35.52	35.47	37.77	37.94	37.67	35.34	32
Government loan guarantees, SMEs	TRY Million	53	285	565	939	1 123	1 114	1 061	1 392	1 641	5 318
Government guaranteed loans, SMEs	TRY Million	75	403	791	1 302	1 622	1 553	1 467	1 888	2 334	7 188
Direct government loans, SMEs	USD Million	552	842	997	855	1 174	928	2 632	1 709	1 764	1 749
Non-performing loans, total	% of all business loans	3.8	3.7	4.91	3.43	2.61	2.82	2.69	2.64	2.68	2.9
Non-performing loans, SMEs	% of all SME loans	3.62	4.79	7.64	4.49	3.1	3.17	3.12	3.27	3.92	4.9
Non-bank finance
Venture and growth capital	TRY thousands	13 676	854	6 316	47 553	373 204	110 097	335 549	124 397	135 308	343 192
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	-93.76	639.58	652.9	684.82	-70.5	204.78	-62.93	8.77	153.64
Leasing and hire purchases	TRY million	11 661	14 385	11 066	10 711	15 112	17 154	24 957	29 485	36 718	44 022
Factoring and invoice discounting	TRY million	6 223	5 610	8 351	12 370	14 213	16 328	20 096	24 715	24 994	31 027
Other indicators
Bankruptcies, total	Number	52	47	50	68	72	141	69	99	108	222
Bankruptcies, Total (growth rate)	%, year-on-year growth rate	..	-9.62	6.38	36	5.88	95.83	-51.06	43.48	9.09	105.56

Source: See Table 41.9 of the full country profile.

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The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-53-en

United Kingdom

Net lending to SMEs remained positive throughout 2016. British Bankers Association (BBA) data shows total net lending to SMEs of GBP 1.5 billion in 2016. The Bank of England (BoE) SME lending statistics show continued positive net lending in the first half of 2017. Gross lending has been on an upward trend between 2013 and 2015, although it fell during 2016 and H1 2017. The stock of lending to SMEs contracted in 2016 by 2.3%, a continuation of a downward trend beginning in late 2009. The stock of lending to corporations increased in 2016 by 6.5%.

The combined rejection rate for new SME loans and overdrafts increased slightly from 18% in 2015, to 19% in 2016. The rejection rate has been at around this level since 2014. In the years prior to 2014 the combined rejection rate has been around 30%. Since 2012, the average interest rate for SMEs has been consistently falling, to 3.2% in 2016, 1.3 percentage points lower than in 2008. Corporate interest rates fell by 1.1 percentage points between 2008 and 2016.

There has been strong growth in alternative sources of finance. 2016 has been another year of growth for leasing and hire purchase finance, reaching GBP 16 900 million, an increase of GBP 1 100 million compared to 2015. Peer-to-peer (P2P) business lending, enabled through online platforms, continued to grow in the United Kingdom, with gross flows of approximately GBP 1.3 billion recorded in 2016, according to AltFi data. Annual growth rates seem to be slowing down, although they remained high in 2016. British Business Bank analysis of Beauhurst data shows that the number and value of equity deals declined in 2016, however this is following strong growth over the previous five years. In the first half of 2017, equity investment was GBP 2.7 billion, this is 59% higher compared to the same period in 2016. This strong performance was driven by several large equity deals in the second quarter of 2017, including two of the UK’s unicorn status businesses both receiving funding rounds in excess of £300m.

The British Business Bank delivers most of the government’s programmes aimed at supporting SME access to finance through a range of financial facilities. As at December 2016, around 56 000 SMEs have benefitted from British Business Bank programmes. The total stock of finance supported by the Bank’s programmes within the United Kingdom amounts to more than GBP 3.5 billion. The British Business Bank participates in a further GBP 5.5 billion of finance which has supported 81 small mid-cap businesses.

The new Designated Bank and Finance Platforms Referrals scheme was launched on 1 November 2016. This scheme will see nine of the UK’s biggest banks pass on the details of small businesses they have rejected for finance to three finance platforms. Access to credit data held by the big banks has also been opened up to increase the reliability of credit scores, enabling alternative finance providers to make better-informed decisions about finance provision to smaller businesses.

In November 2016, the British Business Bank was given an additional GBP 400 million to expand its venture capital programmes to address gaps in later stage venture capital provision more effectively. The British Business Bank launched its first regionally-focused fund in February 2017 – the GBP 450 million Northern Powerhouse Investment Fund – in partnership with the region’s Local Enterprise Partnerships, and will introduce similar interventions for the Midlands in 2017/18.

In January 2017, the UK Government launched the Patient Capital Review. The review will consider all aspects of the financial system affecting the provision of long-term finance to growing innovative firms.

Table 3.42. Scoreboard for the United Kingdom

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs	GBP million	106 827	118 846	116 673	114 552	106 849	102 050	99 828	97 940	96 565	94 359
Outstanding business loans, total	GBP million	540 719	656 542	582 792	536 383	505 700	474 505	451 033	434 875	428 983	448 486
Share of SME outstanding loans	% of total outstanding business loans	19.76	18.10	20.02	21.36	21.13	21.51	22.13	22.52	22.51	21.04
New business lending, total	GBP million	..	..	..	..	..	145 843	162 948	189 525	205 280	233 967
New business lending, SMEs	GBP million	..	37 388	29 469	27 671	22 835	20 521	20 395	22 578	26 634	25 609
Share of new SME lending	% of total new lending	..	..	..	..	..	14.07	12.52	11.91	12.97	10.95
Government loan guarantees, SMEs	GBP million	..	..	61	52	32	43	51	45	34	31
Government guaranteed loans, SMEs	GBP million	..	..	626	529	326	288	337	298	226	207
Interest rate, SMEs	%	..	4.54	3.47	3.49	3.52	3.71	3.60	3.43	3.33	3.22
Interest rate, large firms	%	..	3.49	2.35	2.10	2.25	2.41	2.20	2.45	2.11	2.40
Interest rate spread	% points	..	1.05	1.12	1.39	1.27	1.30	1.40	0.98	1.22	0.82
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	23.00	29.50	26.90	39.20	34.20	35.40	22.20	31.00
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	..	..	6.00	6.00	4.00	4.00	4.00	3.00
Rejection rate	1-(SME loans authorised/ requested)	..	..	..	27.00	30.00	31.00	33.00	19.00	18.00	19.00
Utilisation rate	SME loans used/ authorised	..	..	..	..	86.20	86.40	89.00	88.50	89.90	85.90
Non-bank finance
Venture and growth capital	GBP million	1 809	2 518	1 691	1 735	1 729	1 358	1 503	2 000	1 789	1 555
Venture and growth capital (growth rate)	%, year-on-year growth rate	..	39.19	-32.84	2.60	-0.35	-21.46	10.68	33.07	-10.55	-13.08
Leasing and hire purchases	GBP million	15 200	14 300	10 000	10 400	11 400	12 200	12 900	14 400	15 800	16 900
Factoring and invoicing	GBP million	..	..	8 064	8 704	9 373	9 455	9 929	11 057	10 476	10 930
Other indicators
Bankruptcies, total	Number	16 506	21 965	25 038	21 592	22 175	21 253	18 936	17 662	15 983	17 927
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	33.07	13.99	-13.76	2.70	-4.16	-10.90	-6.73	-9.51	12.16

Source: See Table 42.8 of the full country profile.

Statlink

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United States

Steady, but subpar economic growth in the United States has continued since the Great Recession of 2008-09, with Real Gross Domestic Product recording a Recovery Period (2009Q3 – 2017Q2) average growth of 2.2%, below the historical average of 3.2 percent. This modest growth translated into noticeable progresses in the labour market, solid but declining corporate profit margins, modest recovery in net firm formation, and improved profitability but declining lending activities in the banking sector. The decline in lending volumes seems more pronounced in small business lending, which in turn may have constrained the rebound of number of Small Business Administration (SBA) loan guarantees but not the dollar value of these guarantees.

There are several competing hypotheses as to the causes of the decline in small business credit markets. One possible cause is that it may be a result of a general decline in the risk appetite for borrowing by surviving firms in the real economy, especially SMEs. An alternative hypothesis can be constructed from the observed increase in the concentration of “success”, such as increased concentration of sales, among a few “superstar firms”. This increase in concentration of “success”, on the one hand, may have resulted in a reduced need for bank credit by superstar firms, which can generate a greater amount of organic capital and have greater access to bond and equity financing. Simultaneously, it may have reduced sales, profits and cash flows of the remaining firms, thus reducing their borrowing capacity. This phenomenon would impact the borrowing capacity of most SMEs. Lastly, the decline in small business credit markets may be a result of regulatory changes in the financial sector that were instituted after the financial crisis of 2008-09. Of course, there is always the possibility that all of these and many other undetected factors may have contributed to the subpar recovery in small business credit markets.

Research based on micro-level data has linked the observed concentration of sales to an observed decline in the share of sales going to labour (Autor 2017). Unfortunately, no research has been done on how this increased concentration has affected SMEs, especially their capacity to participate in the credit markets, nor any research has been done on how this increase in concentration has influenced the ability and efficiency of government SME capital access programmes.

Answering these SME-related questions require borrower-level and firm-level micro data across time. Much, if not all, of these data are collected by and stored at various Federal agencies. Several laws and rules on privacy that are integral to the nation’s information infrastructure have the unintended consequence of constraining researchers’ ability to utilise these micro-level datasets. The Federal government is revisiting options for increasing the use of these micro-level Federal datasets for research purposes, however. In addition, the SBA, in collaboration with other Federal agencies that provide assistance to small businesses, worked closely with Federal statistic agencies to develop a set of best practices for linking micro-level data from business assistance programs with data found in statistical agencies to evaluate the impacts on SMEs by federal business assistance programmes.

Table 3.43. Scoreboard for the United States

Indicators	Units	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Debt
Outstanding business loans, SMEs (stock), As of June 30	USD billion	687	711	695	652	608	588	585	590	599	613
Outstanding business loans, total (stock), As of June 30	USD billion	2 280	2 573	2 517	2 299	2 348	2 546	2 670	2 865	3 069	3 316
SME loan shares	Share	30.12	27.65	27.62	28.37	25.88	23.11	21.90	20.58	19.52	18.50
Government loan guarantees, SMEs (flow)	USD billion	21	16	15	22	19	23	23	25	28	29
Non-performing loans, SMEs	Percent SMEs	2.08	2.55	3.32	2.74	1.97	1.43	1.21	1.21	1.23	1.25
Non-performing loans, total	Percent of total loans	1.14	1.70	3.66	3.54	2.08	1.38	1.03	0.80	0.81	1.60
Business loans, loans between USD 10 000 - 1 000 000 (flow)	USD billion	51	53	43	50	53	56	59	63	63	58
Business loans, total (flow)	USD billion	317	362	292	242	308	312	336	391	408	413
Interest rate, SMEs, loans between USD 100 000 - 1 000 000	%	7.96	5.16	3.82	4.09	3.95	3.76	3.55	3.39	3.33	3.46
Interest rate, large firms, loans, Greater than USD 1 000 000	%	6.75	4.29	2.99	3.23	3.07	2.79	2.53	2.48	2.28	2.47
Interest rate spread	%	1.21	0.88	0.83	0.86	0.88	0.97	1.02	0.92	1.06	0.99
Non-bank finance
Venture and growth capital investments	USD billion	36	37	27	32	44	41	45	70	79	72
Leasing and hire purchases	USD million	594 735	613 066	508 239	448 999	361 262	375 681	394 821	401 356	416 253	410 883
Other indicators
Payment delays, B2B, Percent of Accounts Overdue		..	..	..	..	..	..	25.9	..	46.60	..
Business bankruptcies, total		28 322	43 546	60 837	56 282	47 806	40 075	33 212	26 983	24 735	24 114
Business bankruptcies, growth rate	%	43.80	53.75	39.71	-7.49	-15.06	-16.17	-17.13	-18.76	-8.33	-2.51

Source: See Table 43.7 of the full country profile.

Statlink

The full country profile is available at http://dx.doi.org/10.1787/fin_sme_ent-2017-55-en