Securing financing for SMEs

The ongoing debate about whether or not Germany's SMEs (small and medium-sized enterprises) are facing a credit crunch should not cause the enacting of legislation stipulating the compulsory provision of credits.

That is the position of Munich Financial Center Initiative (fpmi), which is calling, instead, for a solution taking into account the interests of both companies and banks. This solution's parameters were laid down in the guidelines ensuring the state's SMEs of having a reliable source of funding and formulated in May 2009 by leading representatives of Bavaria's financial community and by the state's chambers and associations of commerce. Convened under the initiative of Martin Zeil, Bavaria's economics minister, this meeting came up with suggestions parlaying current conditions into proposals fostering fair and transparent dealings between providers of credits and companies. fpmi foresees these guidelines' serving as the basis for a Germany-wide initiative.

The guidelines feature the banks' commitment to, whenever and wherever possible, help their customers survive periods of lacks of liquidity caused by economic downturns and thus leading to short-term corporate encumbrances by coming up with and offering models of financing capable of meeting high standards of banking responsibility and prudence. The banks also committed themselves to adhering to their policies of not striving to reduce their balance sheet totals by curtailing the flow of funds to SMEs, and of placing a high priority on employing company and bank-specific criteria when compiling evaluations of their customers' creditworthiness.

In a corresponding move, the banks are maintaining their policy of refraining from implementing sector-encompassing preclusions of loan provision. The banks also went on record as committing themselves to proactively making use of the financial instruments and support forthcoming from LfA Förderbank Bayern (the state of Bavaria's investment support bank), KfW (Germany's public sector development bank) and the Bürgschaftsbank Bayern (the state of Bavaria's loan sureties bank).

The entire text (in German) of the press release on the guidelines ensuring Bavaria's SMEs of having a secure supply of credit is available below.

Further Information

> Positionspapier Mittelstandsfinanzierung (PDF, 27 kB)
> Liste der Partner des Mittelstandspatkes (PDF, 12 kB)
> Positionspapier Mittelstandspakt (PDF, 124 kB)