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European Commission

Press release

Brussels, 15 April 2014

SMEs find it hard to obtain feedback on their loan applications

A new evaluation published today confirms that the smaller a firm, the larger the likelihood that its credit application might be declined by a financial institution. In particular, smaller companies are struggling to obtain feedback from banks on their declined credit applications even if they have the right to ask for it. To help them eventually to obtain loans successfully, smaller firms need to receive and act on feedback about areas in which their loan application was lacking. Research results indicate that clear benefits would derive for SMEs from obtaining such feedback: about half of SME respondents to the survey found the feedback received by banks useful as regards obtaining future funding. Therefore the evaluation recommends reviving the dialogue between banks and SMEs, by increasing transparency and making efforts to improve financial literacy in smaller companies. As small and medium sized enterprises (SMEs) are an engine of growth in the EU economy, access to credit is crucial both to their survival and that of our economy.

European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship commented: "The financial crisis has affected the ability of the financial sector to channel funds to the real economy. SMEs in particular are key contributors to sustainable growth. However they are still finding it challenging to obtain financing. The evaluation published today highlights that receiving clear feedback from banks on loan applications is crucial for SMEs. Therefore it is essential to revive the dialogue between banks and SMEs.

Recommendations of the evaluation

Research results indicate that SMEs would derive clear benefits from obtaining feedback on their loan applications: about half of SME respondents to a survey found the feedback received by banks useful as regards obtaining future funding.

But it is exactly at the smaller end of the market where there may be issues in obtaining feedback, where SMEs are often scored by the banks using large data pools and the economics of the situation sometimes do not support detailed and intense discussions between bank officials and SME representatives.

To tackle the issues reported in the findings, the evaluation recommends the revival of dialogue on transparency between banks and representatives of SMEs, to raise awareness of enterprises as regards their rights to obtain feedback and to develop an agreed standard of feedback to SMEs.

Next steps

To present the results of the evaluation and discuss its recommendations with stakeholders, the dialogue between banks and SMEs will be reanimated in the course of 2014. The aim is to improve transparency between banks and SMEs, encourage banks to find ways to improve the feedback they give to SMEs and raise awareness on the relevance of such a feedback on loan applications.


According to article 145(4) of the EU Capital Requirements Directive1, SMEs have the right to ask for feedback in writing when they apply for a bank credit. However, the evaluation suggests that very little has been done in practice to actually implement it: SMEs and banks are rarely aware of its existence.

The initiative to revive the dialogue between banks and SMEs is one of the actions aimed at improving SME access to finance included in the latest Communication on Long-Term Financing of the European Economy, which was released in March 2014.

More information available at:

Press release on Long-Term Financing of the European Economy

Communication on Long-Term Financing of the European Economy COM(2014) 168 final, 27/3/2014

EU finance portal - simple and easy access to EU financing providing guarantees, loans and venture capital

Contacts :

Carlo Corazza (+32 2 295 17 52) @ECspokesCorazza

Sara Tironi (+32 2 299 04 03)

1 :

Transposed into national legislation by most Member States and recently converted in the EU Regulation 575/2013, article 431(4)

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