Belgian Finance Club, january 23 2014

Geert Janssens

The future of SME-finance

VKW-survey: Is credit rationed?

Is there a credit rationing? 2011 2012 2011 2012 2011 2012

1. Banks are more reluctant tot give credit 58,7 70,0 34,7 20,6 6,7 9,4

2. Extension of an existing credit line more difficult 78,0 86,2 18,0 9,5 4,0 4,3

3. Lending conditions became much more stringent 68,0 78,2 21,3 15,5 10,7 6,3

4. Banks ask for more guarantees 56,1 64,6 21,6 15,5 22,3 19,9

5. Banks urge more often to sign a convenant 41,3 52,9 42,7 28,9 16,0 18,2

AGREE NOT AGREE NO OPINION

Kefik-survey: Are you credit rationed?

VKW-survey: What is problematic?

16,0

26,024,0

48,7

8,7

18,6

24,3 26,0

55,7

6,0

Less than 1 year 1-5 years More than 5 years Projectfinance No opinion0,0

10,0

20,0

30,0

40,0

50,0

60,0

What type of finance is problematic? Percentage that is worried

2011 2012

Kefik-survey: Do you know your rating?

Equity capital ratio

VKW-survey: Banks advise to look around

20,1

64,4

15,5

2012 - My own bank did advise me to look for alternativesAgree Not agree No opinion

Credit shortage looming large

Source: Deutsche Bank

Alternatives to bank finance?

Source: VKW Metena

Friendly groups or companies

Private equity

Suppliers and clients

Capital market (bonds, commercial paper)

Funds

Autofinance

Stock market

Other

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

30.7

24.7

19.3

14.7

9.3

3.3

0.7

2.0

32.9

26.9

26.9

19.4

13.4

3.4

2.9

4.9

20122011

Percentage in the sample that is thinking about the option

New vehicles for SME loans

Structure

F

K

L

Capital bufferInstitutional parties, GovernmentCooperative members…

FundingInstitutional parties (Bonds)Banks (loans))

LoansTo SME’s

The future?

• More diversity: – new funds, private equity, insurance companies,

mezzanine,…– More debt instruments, market finance,…

• Credit unions• p-2-p lending, crowdfunding,…• Asset based lending • New banks?