Only 25,000 businesses in Greece have access to bank finance

Only 15,000–25,000 large businesses in Greece—out of a total of more than 840,000 businesses—have access to bank financing, a fact that creates insurmountable obstacles in the struggle for survival faced by the overwhelming majority of the country’s small and medium-sized enterprises, especially during this period of pandemic.

This point was made by the president of the Central Union of Chambers of Commerce and the Athens Chamber of Commerce and Industry, Konstantinos Michalos, during the teleconference titled: «The Banking System’s Contribution to Boosting Liquidity in the Real Economy, with an Emphasis on Small and Medium-Sized Enterprises (SMEs),» emphasizing that this situation must change, with responsibility lying with both the banks and the government. The teleconference was held at the initiative of Finance Minister Christos Staikouras, and was attended by representatives of the banking sector, market stakeholders, and senior officials from the Ministries of Finance and Development and Investment.

Among other things, Mr. Mihalos stated: «Access to credit remains a challenge for small and medium-sized enterprises.".

According to a recent survey by the European Central Bank, 22% of loan applications submitted by small and medium-sized enterprises in Greece are rejected. Meanwhile, the corresponding rate in the EU is just 8%.

In essence, 15,000–25,000 large businesses currently have actual access to the country’s banking system. Approximately 100,000 businesses have access to the government’s support system through grants and loans.

These figures correspond to a total of 10% of active tax identification numbers. The remaining businesses—the vast majority of which are small and very small—were left to struggle on their own, without access to financial tools.

We recognize that a key reason why banks are reluctant to grant new loans is the high percentage of non-performing loans.

Another factor cited by financial institutions is that Due to the structure of the Greek economy, there are not enough creditworthy companies.

We are aware of this issue. And we have repeatedly emphasized the need to increase the size and productivity of the country’s small businesses.

However, for this to happen, funding is needed. How can a company attempt to grow without access to financing?;

This vicious cycle cannot continue. The situation must change, with responsibility falling on both the banks and the government. We need to accelerate the debt reduction process by implementing a new round of the Hercules program in conjunction with the creation of a bad bank.

We hope that the implementation of the new insolvency framework will play a positive role.
The government should also, with a view to utilizing the resources of the Recovery Fund, to design comprehensive initiatives to encourage business growth (e.g., tools such as microfinancing).

It is time, however, for the banks to realize that their long-term survival and profitability depend on their core business, which is providing credit and investing capital in the development of the Greek economy.
»So, instead of constantly citing obstacles and problems, they need to finally become part of the solution.".