A new survey released jointly by KfW and the Ifo Institute in Munich indicates a continued contraction in credit access for Germany’s Mittelstand (small and medium-sized enterprises) during the second quarter of 2025. The findings reveal that 35.2% of Mittelstand businesses are experiencing difficulties in securing loans, representing a 1.4 percentage point increase from the previous quarter.
The stricter lending requirements imposed by banks have impacted nearly all sectors of the economy, with the notable exception of the construction industry. Within construction, the proportion of businesses perceiving bank behavior as restrictive has decreased to 26.8%, a drop of 2.8 percentage points. This sector is likely benefiting from the federal government’s recent infrastructure investment package.
Large corporations, conversely, are encountering fewer obstacles. Only 21.5% of these companies reported significant hurdles in obtaining credit, a decline of 2.1 percentage points, making it comparatively easier for them to access capital.
While just 20.9% of small and medium-sized enterprises engaged in loan discussions, the percentage of large companies expressing credit interest rose to 30.3%, an increase of 3.1 percentage points. KfW attributes this rise to anticipated increased trade barriers and greater government expenditure on infrastructure and defense.
“A noticeable easing of credit access for small and medium-sized enterprises will not happen spontaneously” stated Stephanie Schoenwald, an economist at KfW-Research. She emphasized that a resurgence in new business lending will rely on a sustainable reduction in trade policy uncertainty and a demonstrably stronger economic recovery.
