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Credit constraints hit record low for German firms -survey
February 28, 2014 / 3:50 PM / in 4 years

Credit constraints hit record low for German firms -survey

BERLIN, Feb 28 (Reuters) - German firms’ access to credit was easier in February than at any time since records started in 2003, a survey showed on Friday, in stark contrast to companies elsewhere in the euro zone suffering from restrictive lending.

A record low 18.6 percent of companies surveyed reported that access to bank credit was restrictive in February, down from the previous record low of 19.5 percent in December last year, Munich-based Ifo think tank said on Friday.

“Financing conditions for German companies remain excellent,” said Ifo President Hans-Werner Sinn.

Firms across the euro zone have struggled to secure lending during the four-year debt crisis, and lending to euro zone firms by European banks fell by 2 billion euros in December.

That has weighed on investment and forced businesses to turn to alternatives like asset-based loans, bond markets, private equity firms, insurers, their own suppliers and even crowds of private savers to raise funds.

According to the Ifo survey of 4,000 German companies, only lending to construction firms in the euro zone’s largest economy became more restrictive in February than a month ago. Some 24.6 percent of firms in that sector reported credit constraints, up from 23.8 percent in January.

In the manufacturing sector, which makes up about a fifth of the German economy, 17.7 percent of firms reported tight credit conditions, down from 18.5 percent in January.

Germany has weathered the euro zone crisis better than most of its peers, although latest data showed economic growth in the fourth quarter of 2013 was a modest 0.4 percent quarter-on-quarter. (Reporting By Monica Raymunt; Editing by Susan Fenton)

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