Dr. Holger Hatje: Money for SMEs

Dr. Holger Hatje, who holds a PhD in busi­­ness economy, currently sees no credit crunch for SMEs – neither in Germany nor in the Berlin-Brandenburg region. On the contrary: the signs have not been this good in a long time when it comes to investing in the future. In an interview, the banker ex­­plains why that is and how he assesses the economic future of the Berlin-Branden­burg region.

You will be given money only if you already have enough of it: a witty remark that goes round a lot. Especially SMEs moan that many important investments cannot be financed at present because they cannot get money from the banks. Do banks really barely give out loans anymore?

Every now and again, the banking business comes under general suspicion. But the recent past has clearly shown: cooperative banks as well as savings banks are steady, reliable cash and credit givers, even in times of crisis. Here are a few supporting facts and figures. A special Bun­­des­­bank survey about the business loan industry has concluded that the German industry is guaranteed a stable supply of credit. Concerns that a scarcity of money could stifle an emerging recovery have proved to be unfounded. In other words, we are probably seeing a “perceived credit crunch”. For a true credit crunch to occur, credit institutions would have to be unwilling or incapable of gran­­ting loans in spite of acceptable credit worthiness.

Could you corroborate that with actual facts?

Certainly. Besides the German Central Bank, reports by various research institutes also confirm a stable supply of credit to the economy. That is further documented in a survey by the Asso­ciation of German Chambers of Industry and Commerce, which determined a per­­sistently low credit decline rate of three per cent. Thus, the availability of loans to companies is ensured, even though some media like to be more critical in their inter­­pretations. For the members of the association of cooperative banks, 2009 and 2010 have been the most active of the past ten years in terms of granting loans to domestic companies. At the end of September 2010, the already good results of the previous year were topped by 5.4 per cent. That is very impressive.


… and how do SMEs get financed and supported?

An additional credit volume of over one billion euros was set up within the frame­­work of an SME offensive. Those financial means are provided through a special credit fund of the two cooperative central banks, DZ Bank and WGZ Bank.
In addition to classic business financing loans, there is also the possibility of leasing as well as equity (Mezzanine) capital – of course, only where such instruments can be suitably implemented. In doing so, the Volksbanken Raiffeisenbanken cooperative financial network passes on KfW funds in order to channel subordinated equity capital into the economy, which pro­­motes both investments and innovation.

Based on the number of finance commitments by the start of the 4th quarter of 2010, the Volksbanken Raiffeisenbanken cooperative financial network had a subor­dinated-capital market share of 42 per cent for newly founded and young businesses, and above 33 per cent for established companies. Overall, we provide busi­­­ness customers in Berlin and Branden­­burg with a solid nearly 1.4 billion euros.

According to that, the credit crunch is not an issue in Berlin-Brandenburg?

You could put it like that. The lending policy has not changed. The lending criteria and their parameters are not subject to the weather. One of the keywords here is “individual credit worthiness”. In other words, the initial situation of each individual client is key to both assessing the risk factor of financing and determining the borrowing costs or interest rate. The on-site advisers work that out in a personal conversation with the cus­­tomer. A deterioration of the economic situation affects various economic sectors differently and entails branch-specific risks, which must be carefully included in the equation.


What is the difference between banks, savings banks and cooperative banks?

Cooperative banks have better hedging. Although the core of the hedging system dates back more than 70 years, it is obviously effective. It has long been stan­d­­­ard practice for cooperative banks to hedge the full amount (including negotiated interests) of savings deposits, savings bonds, time deposits, demand deposits, and bearer bonds. In addition, there is an institutional protection. Cooperative banks safeguard the liquidity and security of their deposits among each other in the event that one member bank should run into difficulties. By the way, that is in re­­s­ponse to the banking crisis of the 1930s.

How do you assess the future economic development?

The economic development in Germany will likely continue to be positive. Based on their market situation as a metropolitan area, Berlin and Brandenburg will enjoy continued stability in the service sector, real estate market and creative economy. An upturn in world trade will further profit Germany. In the medium term, prospects remain cautiously
optimistic. Domestic demand will grow lightly over the next two years, and the (interest) markets will experience a mild increase in fixed asset investments. From a global point of view, the economic
pick-up in Germany also depends on the condition of its key trading partners. Berlin and Brandenburg have well stood their ground through the eco­­nomic and financial crises, which is why they should continue to utilise and further expand their opportunities in such clusters as medical technology and transport, but also tourism and the housing industry.


20091116-053The author (born in 1959) is a super­­visory board member of the North German cooperative investment company NGB (Hannover), the Berlin stock exchange Börse Berlin AG, the Berlin Zoological Garden AG and TeamBank AG (Nuremberg). Since 2006, Dr. Holger Hatje has been chairman of Berliner Volksbank.