Small business lending has been a focus for most European nations, looking to increase economic growth and cut unemployment. The going hasn’t been easy, and it’s not going to get easier. Results of FICO and Efma’s latest European Credit Risk Outlook, which surveyed more than 100 credit risk management professionals across Europe, show that a “credit gap” looms for small businesses in 2012.
In this survey, 71 percent of respondents said small businesses will find it harder to get credit in 2012. Looking over the next six months, 31 percent of respondents say the aggregate amount of credit requested by small businesses will increase, while just 13 percent say the amount of credit extended will increase. That’s the widest credit gap for small businesses since we launched the survey a year ago.
Europe’s economic woes have shrunk both consumers and small businesses’ demand for credit, no doubt. But what our survey indicates is that supply will continue to fall faster than demand.