Small and medium-sized enterprises (SMEs) in Germany are experiencing increased difficulty in obtaining loans, according to recent findings from the KfW ifo Credit Constraint Indicator. In the second quarter of 2025, 35.2 percent of SMEs reported challenging loan negotiations, up by 1.4 percentage points from the previous quarter. This marks the third consecutive increase and represents the highest level since tracking began in 2017.
The analysis, conducted quarterly by KfW using data from the ifo Institute's economic surveys, found that stricter lending requirements affected nearly all sectors except for the main construction industry. In construction, only 26.8 percent of businesses described banks’ policies as restrictive—a decrease of 2.8 percentage points—which may be linked to benefits from a government infrastructure package.
In contrast, large enterprises faced fewer obstacles when seeking credit; just 21.5 percent encountered difficulties in the second quarter, a drop of 2.1 percentage points compared to earlier periods. The proportion of large companies interested in borrowing also rose to 30.3 percent, an increase of 3.1 percentage points. Analysts suggest this is partly due to preparations for higher trade barriers and expectations of increased public spending on infrastructure and defense.
Meanwhile, only 20.9 percent of SMEs were involved in loan negotiations during this period—an increase of one percentage point but still lower than among larger firms.
“A significant improvement of credit access for small and medium-sized enterprises will not fall from the sky,” said Stephanie Schoenwald, economist at KfW Research.
“This will require trade uncertainty to ease on a sustained basis, along with a tangible economic upswing. Only then would the so far modest recovery of new lending to businesses gain momentum.”
KfW continues to support SMEs through various promotional programs on behalf of the Federal Government.