Survey of non-financial corporations on conditions of access to credit

After a long phase of strong expansion, the rate of growth of bank lending to the private sector began to moderate in 2006. Since 2007 H2 this trend has intensified, as a result of the international financial crisis and its impact on economic activity. The year-on-year rate of growth of credit to non-financial corporations stood at slightly less than 5% in March 2009, against 30% in December 2006. There are various factors behind this development, on the supply and the demand side, and determination of these factors would be extremely useful for an accurate diagnosis of the situation of the credit markets. Unfortunately, there are only a limited number of tools that enable a distinction to be drawn between the supply and the demand side. In this respect, the Bank Lending Survey (BLS), conducted quarterly in Spain in coordination with the other euro area Member States, is a highly valuable tool, as it provides a qualitative approximation of credit institutions’ opinions on credit developments, both for households and fi rms. On the demand side, a number of regular surveys include questions on the extent to which the financial situation represents a barrier to corporate growth (for example, those conducted by the Chambers of Commerce and the Ministry of Industry). However, in these surveys, the “financial situation” generally includes not only the ease with which external financing may be obtained, but also other matters such as the internal liquidity position, making it impossible to isolate the factors that are directly related to access to credit. Recently, the Chambers of Commerce began to conduct a regular survey (numbering six to date) which, although directed exclusively at SMEs, includes a wide range of questions that permit analysis of various aspects relating to access to bank credit. In this setting, the Banco de España has commissioned a survey of a representative sample of non-financial corporations, to obtain significant qualitative data on conditions of access to credit. The fieldwork was conducted between 18 March and 3 April and the final selection comprises 1,384 firms, broken down by size and sector as shown in Table 1.3 The survey included questions on the situation in the last six months and on the outlook for the next six months. The survey’s main added value, relative to the BLS, is that it provides the view from the demand side. In comparison with the Chambers of Commerce survey on access to credit, which is also directed at firms but only SMEs, it has the advantage of a broader scope, and it also permits analysis of how the replies differ according to a wider range of characteristics. Thus, in addition to size and sector of activity, it includes variables relating to financial position (profit performance and level of indebtedness). The following section analyses the extent to which the sample firms had to resort to credit lines and other bank lending, broken down by firm type and financial position. The next section presents the results of the credit applications made, and the following section, the implications for the firms and the outlook for conditions of access to new lending. This is followed by a series of conclusions. The full text of the survey questions, together with the aggregate replies, is presented at Annex 1.