Loans harder to secure, says ECB

Eurozone governments want banks to lend more

Small businesses in the eurozone are finding it harder to get loans despite massive government stimulus to free up credit markets, a survey suggests.

The European Central Bank (ECB) survey of 6,000 small firms found one-third said access to finance deteriorated in the first half of the year.

The firms blamed the worsening economic outlook, high costs and the increased margin levels needed to get a loan.

Governments have spent billions of euros to make loans easier to secure.

The central bank's study found that a net 33% of small and medium sized businesses said getting access to loans from banks had got harder over the previous six months.

When asked to look ahead over the next six months, more respondents said it would get harder to secure loans than said it would get easier.

One of the main reasons why governments have ploughed so much money into their economies is to encourage banks to start lending again.

They recognise that economies cannot recover fully until businesses, and individuals, can start borrowing the amounts of money needed to buy goods and stimulate demand.

The survey was conducted between 17 June and 23 July. It is the first of its kind and will be repeated every six months in order to determine whether money is flowing more freely within the eurozone.