The System of Preferential Lending to Small and Medium-Sized Enterprises in Germany
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Publication date: 2014-06-30
GNPJE 2014;271(3):133-151
The article looks at how preferential loans are used to support small and medium-sized enterprises (SME) in Germany. The author highlights the positive role of the German model for the Polish system of preferential lending to SMEs. The author investigates the effectiveness of available support programs in terms of how they meet the expectations of small and medium-sized enterprises and the economy as a whole. In her analysis, the author uses selected recent statistics and sources of long-term data. These include government reports and studies commissioned by the German economy ministry. Small and medium-sized enterprises in Germany benefit from public support in the form of preferential loans granted by government-owned development bank KfW, Karpowicz notes. The bank offers loans to those wanting to establish their own business, in addition to loans to finance specific projects and support for self-employment. Studies show that the German government’s policy of supporting the SME sector through KfW is well thought out and long-term in nature, the author says. KfW conducts in-depth studies of the German economy and the country’s business environment. However, the bank’s support is not distributed evenly between western and eastern Germany, according to Karpowicz, with western regions claiming the bulk of the funds. The author’s research shows that KfW loans are a key form of public support for Germany’s SME sector. Meanwhile, Poland lacks a comprehensive government-financed system of preferential loans to SMEs, according to the author. Most of the available loan and guarantee programs are financed from European Union coffers and are subject to short-term budgeting, which makes long-term planning difficult. Polish economic policy makers need to develop new tools to increase the efficiency and effectiveness of preferential lending to SMEs, the author argues. One promising initiative is the Polish government’s de minimis guarantee program for the SME sector launched in mid-March 2013 and modeled after German preferential loan programs.
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