KfW ifo Credit Constraint Indicator

KfW-ifo Credit Constraint Indicator

Construction and interpretation of the KfW-ifo Credit Constraint Indicator

The Credit Constraint Indicator has been surveyed on a quarterly basis since 2017 as part of the ifo economic surveys following a methodological revision. Credit constraint shows the percentage of enterprises that describe banks’ position in loan negotiations as ‘restrictive’. In order to ensure that estimates of banks’ lending propensity are based on enterprises’ original experiences, only those enterprises are surveyed that previously reported having conducted loan negotiations with banks in the preceding three months. The development of this percentage can then be interpreted as an indicator of changes in demand for bank loans.

The evaluation of the survey findings for the KfW-ifo Credit Constraint Indicator is broken down by size classes and sectors. Each month about 9,000 enterprises from trade and industry, construction, wholesale, retail and services (without the banking and insurance sectors or the state) are polled on their business situation, among them some 7,500 SMEs. Enterprises are generally classed as small to medium-sized if they employ a workforce of not more than 500 and record an annual turnover not exceeding EUR 50 million. For a more accurate analysis, however, these quantitative distinctions have to be drawn more narrowly for retail trade (maximum annual turnover of EUR 12.5 million), the building and the construction industry (up to 200 employees) and services (maximum annual turnover of EUR 25 million). All enterprises that exceed at least one of these thresholds are classed as large-scale enterprises.

January 2025 Record share of SMEs unhappy with restrictions on lending
October 2024 Banks are raising the bar in loan negotiations with businesses
August 2024 Accessing credit is becoming more difficult again for businesses
May 2024 Credit access for SMEs improved slightly but remains restrictive
January 2024 Access to credit remains difficult for businesses
October 2023 Challenges are mounting for businesses negotiating loans
August 2023 Access to credit remains challenging for businesses
May 2023 Credit constraints decreased at the start of the year
February 2023 The situation in the credit market is becoming increasingly difficult for businesses
October 2022 Credit access has become significantly more difficult for SMEs
July 2022 Banks tighten lending to SMEs slightly
April 2022 Banks ease credit access for SMEs again
February 2022 Credit constraints are easing – large enterprises are benefiting the most
October 2021 Low SME credit demand – constraints remain higher than average
July 2021 SMEs can access credit more easily again – large enterprises, particularly construction firms, face problems
April 2021 Large companies find it easier to access loans again – banks remain restrictive for SMEs
January 2021 Credit demand by businesses is down sharply – banks are becoming more restrictive
October 2020 Small and medium-sized enterprises face growing barriers in accessing credit
July 2020 KfW ifo Credit Constraint Indicator rises as coronavirus makes banks more cautious
April 2020 Launch of the KfW-ifo Credit Constraint Indicator – data points to calm before the storm

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