Peeters urges banks to increase their credit extension to small businesses

Flemish minister-president Kris Peeters CD&V has called on the banking sector to increase its credit extension to SMEs after figures released by the Knowledge Centre for Financing SMEs Kefik yesterday indicated that banks increasingly refuse credit applications from small and medium enterprises. “It is essential that banks extend credit to entrepreneurs in a responsible manner. Businesses should be in a position to invest in order to pull Flanders out of the crisis,” Peeters said in reaction to Kefik’s figures.
Kefik yesterday spoke of an “alarming trend” referring to the 16% of credit applications that were re refused to SMEs by banks compared to a rate of 12.9% in 2011. The situation seems to be even worse for smaller businesses and self-employed. The organisation for the self-employed, NSZ, indicates that “almost one in three businesses that were refused credit extension during the past two years were forced to cut back on their activities or staff”. It further expressed concern that these banks often failed to motivate their refusal which, according to NSZ president Christine Mattheeuws, “is essential to indicate to small businesses how they can possibly incur changes”. CEO of the Union of Independent Entrepreneurs Unizo Karel Van Eetvelt also expressed his concern at the increase in credit refusals.
Kris Peeters has now urged the banks to ‘be more serious about their role and take up responsibility’, saying: “The banks cannot use the financial economic conditions as an excuse for setting the bar so high for independent entrepreneurs.” But the banks attribute their refusal to businesses’ lack of repayment capacity and severe international banking regulations concerning conditions pertaining to credit extension. He now hopes to turn the tide by further strengthening the Banking Plan he launched last year and by consultation with the sector. Some of the measures of the Banking Plan include government guarantees for ordinary credit commitments and increasing the possible loan amount for the so-called ‘win-win loans’ by friends or family to companies from 100 000 to 200 00 euros.