Why do SME need extra funds and why should your bank manage such applications?

SME companies are one of the major groups of bank customers. To facilitate services for small and medium-sized enterprises, banks implement cutting-edge software and make it available to them. Many banks attract business customers by offering additional services to ease the operations of a company.

Guest blog by Ksenia Goncharova, Sales Manager, Financial ServicesComarch Benelux

SME funding — an immense financial gap to be filled

According to the “European SMEs: Filling the Bank Financing Gap” report prepared by Euler Hermes Global, there was a financial gap in 2019, understood as the inability to acquire funds by small and medium-sized enterprises despite the ability to use them for further growth. The gap value is estimated to reach 400 billion EUR. This is the difference between the needs reported by SMEs and available bank credits. The largest gap was diagnosed in the Netherlands (22% GDP), Belgium(14% GDP), France (9% GDP) and Italy (4%).

Although SME funding is often limited, this sector of enterprises is the major employer on the EU market. Small and medium-sized enterprises operating in the European Union employ more than 90 million people, i.e. close to 70% of the employed in the non-financial EU sector. This means that the limited funds for SMEs mean not only fewer investments but also exert a negative impact on the labour market.