OECD publishes Scoreboard of SME Finance – SMEs harder hit by credit crunch than larger companies

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On the occasion of a special event coorganized on 19^th April, by the OECD and the G20, presided by H.R.H. Princess Máxima of the Netherlands, the UNSG's Special Advocate for Inclusive Finance for Development and Honorary Patron of the G20 Global Partnership for Financial Inclusion (GPFI) and the OECD Deputy Secretary-General Yves Leterme, the OECD published a first edition of its Scoreboard on SME Financing. This Scoreboard is intended to provide an overview of comparable data related to SME access to finance and serves as a basis of exchange for policy making for OECD member countries. It has been established on a sample of 18 participating countries and is intended to be extended further in the future.

The first edition of the Scoreboard looked at the evolution of SME access to finance in the participating countries from 2007 to 2010, examining in particular the pre-crisis stage (2007), the crisis (2008-9) and the recovery phase (2010). The Scoreboard finds that the crisis has had a strongly negative impact on real economic performance of SMEs, providing evidence for a sharp contraction of demand, in parallel to the general decline in GDP, production, employment and sales. The Scoreboard reports on a clear tightening of credit standards, leading to a loan rejection ratio increase from 12% to 18% in 2009. The rejection ratio declined again to 11% in 2010. SME credit conditions were found to be more severe as compared to those of larger companies in terms of higher interest rates, shorter maturities and greater requests for collateral. Even if the interest rates trended downwards over the reference period, the interest rate differential between SME loans and loans to larger business grew.

The Scoreboard finally highlights that in response to this situation, nearly every country either launched loan guarantee programmes and/or a direct lending programmes, or modified the variables of existing facilities, in order to support SME access to finance in this difficult period.

The Scoreboard has been prepared by the OECD Working Party for SMEs and Entrepreneurship (WPSMEE). AECM will contribute with specific data on guarantees to the future editions of the OECD Scoreboard. For more information, contact Miriam Koreen, Head of the OECD's SME and Entrepreneurship Division (miriam.koreen@oecd.org; tel: +331 4524 8141) or visit the OECD's website page.

Link: http://www.oecd.org/document/43/0,3746,en_21571361_44315115_50137131_1_1_1_1,00.html

Source: OECD Web-site - Scoreboard