EU Commission calls on banks to provide more active information

The EU Commission wants to reformulate the "High-Level Principles". "The core statement of these high-level principles is that credit institutions must provide companies with the reasons for a loan refusal when they ask for them," explains the Commission. Carl-Dietrich Sander, Head of the Financing Rating Division the SME consultant. "It should be a matter of course that a bank or savings bank explains the reasons for a loan refusal to its customer on its own initiative," demands Sander. According to the SME consultants, the results of their "SME Bank Barometer 2016" show that this is far from being the case:

Only 14.1 percent of the companies fully agreed with the statement "Our bank openly communicates the reasons for loan approval and rejection", while 17.5 percent said that this was not the case at all. The association "Die KMU-Berater - Bundesverband freier Berater e. V." demands more active communication from banks and savings banks.

Business partnership desired

The SME consultants cite two decisive reasons why they consider active communication on the part of the credit institutions to be self-evident. On the one hand, the company has handed over extensive documents and information to its credit institution. Based on this information, the bank or savings bank assesses the creditworthiness of the company and decides whether or not to provide a loan and under what conditions. "In the sense of a business partnership, it is simply a question of reciprocity and fairness to provide concrete information as to why a loan is not possible from the bank's point of view," emphasises Sander.

The second reason from the point of view of SME consultants: without such feedback, a company has no chance to include the view of its bank or savings bank self-critically in the analysis of its own situation and to derive improvement activities. „

Enable improvement activities

Such improvement activities benefit not only the company but also the bank or savings bank," Sander is sure. Because the enterprise becomes more stable thereby and its credit standing becomes better, which can be only in the sense of the lender. The SME consultants demand the same openness of the banks and savings banks also for the result of the rating prescribed by the bank supervision, which must be the basis of every credit decision. "The open discussion about the assessment in the rating also benefits companies and banks alike" Sander is convinced.

The SME consultants would also like to see the support of the trade associations for their demand for more open communication. "Unfortunately, we don't really see this at the moment, because, for example, the Association of German Chambers of Industry and Commerce, the German Confederation of Skilled Crafts and the Federation of German Industries had been included by the banking associations in the run-up to the adoption of these High-Level Principles and obviously go along with the inadequate wording," says Sander.

Further information: Specialist Group Financing Rating of SME Consultants