Restoring Financing and Growth to Europe’s SMEs Post author By Philip Lane Post date October 15, 2013 Bain / IIF report is here. Categories In Uncategorized 4 Comments on Restoring Financing and Growth to Europe’s SMEs ← The 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel → Budget 2014 4 replies on “Restoring Financing and Growth to Europe’s SMEs” A report worth reading, if one had the time, and if the pagination worked on screen reading. (It seems to move two pages forward, one page back, or something like that!!) Figure 2 is well worth a look. It shows the decrease in lending from peak to present for a specific SME category , for a number of countries: The results: Ireland -82% Spain -66% Portugal -45% France -37% Netherlands -32% Italy -21% Some reasonable people might conclude that what we are experiencing is a depression caused by the policy of bank deleveraging. The IIF/ Bains report, of course, does not conclude that; this is after all a bankers report, but the facts don’t lie. A second major finding, should give pause to those who propose or agree to EZ bank consolidation. SMEs, the report finds, depend to a much larger degree than large businesses on local small regional banks. The big banks are simply not interested in lending to Ma and Pa run outfits. No surprise there, but lets hope the implications are fully understood in Ireland. A series of proposals are put on the table, but some seem more interested in getting insurance funds an outlet, and in getting centralised credit risk information, than in helping the SME sector. Another very important finding is outlined in Figure 10, showing the importance, and perhaps over importance, of SME employment for various countries. @Joseph Ryan,I did read it was quite surprised,cracker off a read for someone like me who really doesn’t have much off a clue about this topic. But I know a thing or two about this field,why bother outsourcing it,ahh yeah the hand holding and fees! Where’s the prospectus,it’s your money ask them or file a FOI it should be on the website,how much has been deployed on what terms etc… http://www.nprf.ie/SMEFunds/SMEFunds.htm @JG Thanks for the link. I was not aware of this commitment by the NPRF. To me, its a good idea. The question is should State reserves, such as they are, be allocated to supposedly risk free funding of core continental countries earning zero interest; should those funds be used on a realistic risk basis to provide capital for businesses in Ireland that employ people in Ireland. There will be winners and losers, but hopefully the funds will break even. I do hope however that the funds insist of equity, with good board participation in the companies concerned. It was a very bad summer for plants in northern europe given there was virtually no spring. I saw a rosebush today with 4 fading blooms and 6 buds that didn’t even open and the latter reminded me of the SME sector. When there is limited light or capital the weaker institutions get left behind. Comments are closed.