Despite recent interest rate cuts, European businesses, and Italian ones in particular, continue to encounter difficulties in accessing credit. The ECB data highlight a rather complex picture, between declining demand for loans and still restrictive granting criteria.
Lower rates, but businesses struggle to access credit
The recent interest rate cuts, which occurred between June and October this year, did not produce the expected results on the business credit front. According to the investigation “The euro area bank lending survey” of the ECB, relating to the third quarter of 2024, the criteria for granting the business loans they remained unchanged after two years of tightening, with prospects of further tightening by the end of the year. The main motivation on the part of the banks lies in the risks linked to economic uncertainty, inflation and geopolitical tensions.
The decline in the cost of money has also failed to stimulate a recovery in credit application. It is true that the request for loans by businesses has shown a slight change in direction, after a negative series that began in the third quarter of 2022. However, significant differences remain between the various European countries. Germany, France and Spain recorded growth in demand, while a contraction was observed in Italy. This trend reflects a context in which financially weaker companies they tend to give up on submitting requests, thus increasing the probability of acceptance for applications actually submitted.
Loans to businesses: construction and manufacturing declining
L’access to credit remains problematic, especially for small and medium-sized businesses, which continue to suffer a higher rejection rate than large companies. This dynamic is particularly evident in Germany, while in Italy the situation appears more favorable, with a lower number of waste compared to the recent past. However, Italy remains the only major European country with declining loan demand, a trend that could be linked to the self-selection of the most vulnerable businesses.
According to data from the Bank of Italy, in fact, i bank loans to businesses non-financial companies have recorded a significant decline since September 2022. The latest available data, relating to August 2024, highlights an outflow of 7.7 billion euros, an increase compared to the previous months (4 billion in July and 2.5 billion in June).
Over the last twelve months, the overall contraction in loans to businesses was 3.4%. There decrease in credit it has affected sectors differently. Construction and manufacturing, which are most dependent on bank credit, saw significant declines in August, down 8.8% and 6.1% year-on-year, respectively. Conversely, services (-2.8%) and agriculture (-1.9%) were less penalized, reflecting lower “credit intensity” in these sectors.
