France has approximately 4.2 million small and medium-sized enterprises (SMEs), which account for 99.9% of the total business population. The total number of firms has increased by 7.7% between 2020 and 2022.
The stock of outstanding business loans to SMEs soared in 2020 by 28%, partly due to the Government loan guarantees scheme as a response to the pandemic crisis. The stock of outstanding business loans to SMEs stabilised at 348 558 million in 2022, an increase of 32% relative to 2019. As a result, the share of SME outstanding loans in total business loans has risen slightly, exceeding the pre-crisis average by 1.3 percentage points.
In recent years, SME demand for short-term loans has fluctuated significantly. The pandemic crisis fuelled SME demand for short-term credit with the stock of SMEs short-term outstanding loans increasing by 125% year on year in 2020 and the share of SME short-term loans in total business loans rising by 72%. The trend shifted in 2021 as SMEs started repaying their short-term loans. By 2022, the share of SME short-term loans dropped to 9.3% due to SMEs' preference for long-term credit.
Interest rates for SMEs and large companies increased in 2021 and 2022 after a major drop in 2020, but stabilised in 2022 above the pre-crisis level. The interest rate gap between SMEs and large companies widened in 2022. Access to financing for SMEs has become slightly more difficult, as indicated by the rising rejection rate exceeding pre-crisis levels.
In 2022, private equity investments declined by 9%, following an exceptional year in 2021. Nonetheless, the number of companies funded through private equity rose significantly, marking a 14.5% increase compared to 2021 and exceeding the average level observed between 2012 and 2021. Investments in venture and growth capital (EUR 5.1 billion invested, +11% vs. 2021) and expansion capital (EUR 5.4 billion invested, +3% vs. 2021) are on the rise. The sub-total of venture capital, growth capital and expansion capital investments has grown 4.4 times in 10 years.
Crowdfunding continues to grow, despite macro-economic, geopolitical and health-related turbulence. Since 2015, the annual volume of equity crowdfunding provided through the platforms grew by a multiple of 14. Crowdfunding platforms benefit from a specific regulatory framework since 2014 which enables them to operate without a minimum amount of equity.
Factoring volumes increased by 15.5% in 2022, as did the number of ongoing operations (+ 7.9%). Activity development has been important since the pandemic crisis, with a 30% increase of volumes compared to 2020.
The plan France 2030 seeks to position France as a leader in innovation in key sectors. Following a decrease in investments in 2020, it recovered in 2021. Investments in digital, healthcare and consumer goods account for 73% of total investment.
In 2020, the French government initiated a EUR 100 billion recovery plan ('France Relance'). Stemming from COVID-19 crisis responses. This plan, grounded in three pillars (environment, competitiveness, and cohesion), seeks to overhaul the economy and generate new employment opportunities. Additionally, the French government has introduced measures to address inflation and high energy costs, including energy assistance programmes such as capping electricity prices.
The financial stability of French companies was impacted by both the COVID-19 crisis and the rise in gas and electricity prices. Strengthening the balance sheet was a critical concern to safeguard the investment capacity of SMEs and mitigate the risk of insolvency. Credit mediation and loan programmes remained crucial in supporting SMEs.