The promotion and support of small and medium-sized enterprises (SMEs) forms an essential ingredient of the policies designed to help improve Europe’s economic performance. A key issue is whether SMEs face difficulty obtaining bank loans. Using pre-crisis survey data from 2005 and 2006 for nearly 3,500 SMEs (firms with fewer than 250 employees) in the European Union (EU), we investigate the determinants of perceived bank loan accessibility at the firm level and at the country level. Based on hierarchical (multi-level) binomial logit regressions, our findings show that the youngest and smallest SMEs have the worst perceptions regarding access to bank loans. The SMEs in nations with concentrated banking sectors are more positive about loan accessibility. In addition, a high fraction of foreign-owned banks is associated with improved perceptions regarding loan accessibility in the EU 15 but not in the EU 10.

SMEs, bank loans, concentration index, credit constraints, money supply, multi-level
Financial Markets and the Macroeconomy (jel E44), Money Supply; Credit; Money Multipliers (jel E51), International Financial Markets (jel G15), Banks; Other Depository Institutions; Mortgages (jel G21)
Erasmus Research Institute of Management
hdl.handle.net/1765/17699
ERIM Report Series Research in Management
ERIM report series research in management Erasmus Research Institute of Management
Erasmus Research Institute of Management

Canton, E.J.F, Grilo, I, Monteagudo, J, & van der Zwan, P.W. (2012). Perceived credit constraints in the European Union (No. ERS-2010-001-ORG). ERIM report series research in management Erasmus Research Institute of Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/17699