The financial entities deny 70% of the credits that the companies ask for

The crisis has meant an almost total closure of the credit to the productive economy. This complaint, proclaimed for years by Spanish companies and families, already has figures. After reaching its peak (45%) in 2006, the rate of credit granting throughout the Spanish financial system has plummeted to 30% at present.

If during the bubble companies obtained almost half of the loans they requested, now this figure is only a third, as indicated by the Financial Stability Report of the Bank of Spain for May 2013. This variation is, in practice, Spanish companies either do not have access to new loans, or if they do, it is with worse conditions.

The Bank of Spain data does not reflect, however, the access conditions of all economic agents. The credit restriction is even greater in nationalized financial institutions (to which the Bank of Spain, generically, includes Group 1). Thus, Bankia, CatalunyaCaixa and Novagalicia hardly grant 20% of the loans that companies request.

This difference between rescued banking and healthy banking “can be thought to respond, to a large extent, to the most difficult financial situation of the entities of this group over recent years,” explains the institution governed by Luis María Linde. In other words: they did not give credit because they preferred to invest in public debt or to clean up their own accounts .

The analysis on the granting of loans carried out by the Bank of Spain is “indicative and limited” , as recognized by the public supervisor, since it does not reflect the credit information of the entire population, but only of those non-financial companies that they request financing from entities with which they are not already related.

Essential to regrow

If the unions and the employers (and the European authorities) coincide in something, economic growth is almost impossible if credit does not circulate again. Thus, last week the president of the European Council, Herman Van Rompuy, urged the European Central Bank (ECB) to end the fragmentation of the Eurozone and facilitate the financing of SMEs in peripheral countries. “It is unacceptable that companies in southern countries should pay more to finance themselves,” he said.

“The main problem in this country is the lack of funding for small and medium-sized companies,” explains Juan Pablo Lázaro, Cepyme’s vice president, who denounces that the flow of credit continues to decrease quarter by quarter . His organization is betting on a series of measures that open the tap: to oblige state-subsidized entities to allocate a percentage of credit to SMEs, to allow companies to pay VAT on a cash basis (that is, when it has already been charged, which would allow a 10% increase in liquidity) and comply once and for all with the delinquency laws in the administrations.

In the same vein, the president of the CEOE, Juan Rosell, has repeatedly expressed that he has warned of the “lack of oxygen” of Spanish companies, which is leading to the closure of a good part of them. For their part, both the UGT leader and the CC OO have urged the authorities to carry out a profound reform of the financial system that allows access to credit to families and businesses.

Nationalized entities such as Bankia, after completing their recapitalziations, have announced in recent days campaigns to finance productive activities . Thus, the bank chaired by José Ignacio Goirigolzarri has committed to inject 45,000 million euros in the business sector over the next three years.

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Credit falls in all sectors

The credit in the era FROB has contracted in 136,000 million, and with the administrations increasingly indebted If there is no credit, it will not be for lack of public aid made available to the banks. Despite the almost 600,000 million public euros lent and injected to the entities, credit has only fallen in Spain . The hundreds of billions placed by the Government, Eurogroup and the European Central Bank at the disposal of banks have not reached the economy on foot.

Credit to non-financial companies (excluding construction companies) has fallen by 5.6% in the last year, in addition to the fall recorded in 2011 of 3.7%. If we add the companies of the brick sector the collapse in these two years would be more than 30%.

Families, on the other hand, have also seen their access to new financing cut. Thus, natural persons have seen credit decline by 4.9% in 2012; decrease that adds to another 2.8% drop in 2011, according to the Bank of Spain. There are several factors that explain this reduction : on the one hand, a reduction in the credit quality of families and companies, which in turn tend to demand less funds and less productive investment .

“To this is added the structural need of the Spanish economy for a deleveraging process after a prolonged period of notable increase in indebtedness, ” explain the BdE analysts. That is to say, it is necessary to reduce the general debt levels of the Spanish economy before giving back credit.

And, as this newspaper has already published, the credit has been reduced by a total of more than 136,000 million euros since the financial restructuring process (it was FROB) began in Spain. Only public administrations, which have increased their financial needs by 52% , now have access to bank financing better than ever.

“The concentration has put more limits on financing”

Daniel Cuñado is the owner of Pihasa, a family business with 34 employees that has been designing and manufacturing pipe supports for 30 years. Although it recognizes that it has always opted not to resort to lines of credit for companies, it has noticed, as many entrepreneurs, the tightening of all financing conditions . “The risk departments of the banks are now much more rigorous, before accessing an endorsement line was a procedure and now you have to present annual balances, accounts and answer many questions,” he explains.

In his opinion, at the end of the credit tap another factor has been added that has hurt thousands of small and medium-sized companies: the process of concentration of the financial sector. “Before a company could have more lines of credit open, one, for example, with the CAM, and another with Banco Sabadell, now, being the same entity, they do not allow having two lines open,” he says, while pointing to a large part of the large Spanish companies (customers of the smallest) as part of the problem: “They abuse because they know their position of dominance and pay when they feel like it , which harms the liquidity of solvent SMEs”, denounces.