The promotion and support of small and medium-sized enterprises (SMEs) is an essential component of policies designed to help improve Europe's economic performance. A crucial 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 perception of 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 perception of loan accessibility in the EU 15 but not in the EU 10.

Bank loans, Concentration index, Credit constraints, Money supply, Multi-level, SMEs
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),
ERIM Top-Core Articles
Small Business Economics: an entrepreneurship journal
Erasmus Research Institute of Management

Canton, E.J.F, Grilo, I, Monteagudo, J, & van der Zwan, P.W. (2013). Perceived credit constraints in the European Union. Small Business Economics: an entrepreneurship journal, 41(3), 701–715. doi:10.1007/s11187-012-9451-y