Dutch banks less keen than European banks to grant loans to MKB owners

For owners of small and medium-sized enterprises (MKB) in the Netherlands, it is on average more difficult to take out a bank loan than in the rest of Europe. Nearly a quarter of Dutch bank loan applications were turned down.

Nearly one quarter of applications turned down

Nearly one quarter of bank loan applications submitted by MKB owners were not granted in 2010. The turn-down rate is above the European average. The rate was only higher in Bulgaria, Ireland and Latvia. Few bank loan applications were denied in Finland, Malta, Cyprus and Poland.

Banks receive many applications

Unlike in most other European countries, Dutch MKB owners relatively often turn to banks for loans. In other European countries, it is common to call in other persons or institutions.

Bank loan applications granted to MKB owners, 2010

23 percent of bank loan applications turned down last year

The proportion of denied bank loan applications in the Netherlands has grown from 7 percent in 2007 to 23 percent in 2010. In 18 of the 20 European countries, the percentage of denied bank loan applications has risen between 2007 and 2010. The most substantial increases were recorded in Bulgaria, Ireland, Latvia and Lithuania. After these four countries, the Netherlands occupies fifth place. Finland accounted for the smallest change followed by Germany and Belgium.

Proportion of bank loan applications denied to MKB owners MKB owners, 2007-2010

Reasons for denial

The main reason for European banks to turn down applications were ‘low solvency level’, ‘lack of personal capital’ and ‘not enough security to pledge against the loan’. These were also the most important reasons in the Netherlands to turn down MKB loan applications. European entrepreneurs themselves thought the high interest rates were the main reason for not granting loans.

Maartje Kessels