German companies struggle to get loans

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As many as 28.8% of companies seeking credit in the services sector reported difficulties, around 8.4% of chemical companies and 22.5% of car manufacturers.

Smaller businesses and the self-employed have been hit the hardest due to their reliance on bank loans. (AP)

Around one in four German businesses seeking new loans report restrictions from lenders as high inflation and concerns over energy supplies rattle Europe’s biggest economy, according to a survey.

“The difficult economic climate is currently making banks more cautious,” said Klaus Wohlrabe, head of investigations at Information ve Forschung (Ifo) on Monday.

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

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

As many as 28.8% of companies seeking credit in the services 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 .

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Germany will sink into recession, inflation will soar in 2023, government admits

Source: Reuters

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