German companies find it increasingly difficult to access credit – Ifo


BERLIN, Oct 24 (Reuters) – Around one in four German businesses seeking new loans are reporting restrictions from lenders as high inflation and concerns over energy supplies rock Europe’s biggest economy. Europe, according to a survey published on Monday.

The figure – 24.3% – is the highest seen since 2017, said the Ifo institute, which conducted the survey.

“The difficult economic climate is currently making banks more cautious,” said Klaus Wohlrabe, head of investigations at Ifo.

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“Without new loans, some businesses could struggle for economic survival,” he added.

As many as 28.8% of companies seeking credit in the service sector reported difficulties, around 8.4% of chemical companies and 22.5% of automakers, Ifo said. In retail, the figure was 15%.

Smaller businesses and solo freelancers have been hit the hardest due to their reliance on bank loans, according to the institute.

Germany heads into recession as energy standoff with Russia, rising prices and supply bottlenecks take their toll, with government predicting 0.4% contraction next year .

(This story has been edited to correct paragraph 5 to indicate that 8.4% of chemical companies and 22.5% of automakers looking for credit are struggling, not 35% for both, after the Ifo corrected its statement)

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Written by Rachel More, edited by Louise Heavens

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