Lending to Dutch SME sector down less markedly

Statistical news
Datum 11 november 2015

The largest banks in the Netherlands reported a less pronounced decline in their loans to small and medium-sized enterprises (SMEs) in the first two quarters of 2015.

While loans provided to the SME sector by the major banks were down by EUR 5.3 billion in the last two quarters of 2014, the decrease levelled off to EUR 2.1 billion in the first half of 2015. Most of the decrease is attributable to loans in excess of EUR 0.25 million, as the major banks reported an increase – totalling EUR 234 million – in the provision of credit to SMEs up to that sum since the fourth quarter of 2014 (Chart 1).    

Chart 1 Lending transactions from Dutch major banks to the Dutch SME sector
(in EUR million)

Note: these are the total numbers of transactions per quarter, the figures have not been seasonally adjusted.

Moreover, demand for credit from the SME sector was up in the third quarter of 2015. This trend was reported by a group of banks with combined net weighted market shares of 51% (see Chart 2). The banks also reported unchanged credit standards for SME loans, as emerged from the ECB’s latest quarterly Bank Lending Survey (BLS), a qualitative survey among a representative group of banks.

Chart 2 Changes in credit demand from enterprises
 
(net weighted percentages of Dutch banks)

Note: Net weighted percentage is the balance of the number of banks reporting a rise in credit demand (+) and of banks reporting a decline (–) relative to the previous quarter. The banks’ responses are weighted according to their share in the market segment concerned (+100 = all banks have reported rises).   

It would appear that the SME sector’s increased demand for credit in the third quarter of 2015 is a continuation of the positive sentiment observed in the second quarter, when the banks reported a reversal in the declining demand for the first time in six years. Credit demand from large enterprises continued to grow and has now been positive for more than eighteen months. Most Dutch banks (with combined weighted market shares of 98%) expect demand for credit from SMEs to pick up further over the next quarter.