Escrivá (Bank of Spain): "SMEs are the ones that finance large companies"

Barcelona"In Spain, SMEs are the ones that finance large companies on clean terms." This is how the Governor of the Bank of Spain, José Luis Escrivá, described the complicated financing situation of small and medium-sized enterprises, aggravated by the fact that large corporations generally take more than two months to pay their suppliers. He made these remarks on Tuesday during his address to the board of directors of Pimec, where he also held a dialogue with the president of the Catalan employers' association, Antoni Cañete.

During the meeting, the former Minister of Social Security and former President of the Independent Authority for Fiscal Responsibility (AIReF) also addressed the need to improve access to financing for small and medium-sized enterprises (SMEs) at the European level, urging banks to facilitate credit for start-up projects and help SMEs grow faster. This call was echoed by Cañete, who added that "listed companies take 198 days to pay," which complicates the liquidity of small businesses. Furthermore, the President of PIMEC recalled that "one in three companies that closed during the previous crisis did so due to a lack of liquidity."

According to Escrivá, SMEs pay their suppliers in an average of 32 days, while large companies take an average of 61 days. He also criticized the fact that SMEs are often "more constrained" when seeking financing. In this regard, he detailed that, according to data from the Central Credit Register (CIRBE), between 2021 and 2023, 28.9% of companies with fewer than five employees had their loan applications rejected, a percentage that drops to 20.5% for companies with between five and nine employees, and to 9% for those with nine or more employees.

Greater solvency and solutions to absenteeism

The Governor of the Bank of Spain has thus underscored the need to strengthen a European platform for securitizing loans to SMEs—that is, enabling them to sell loans to third parties—and explained that work is already underway. He specified that the percentage of securitized loans to SMEs is 7.3%, while the European average is 15.9%.

Escrivá also revealed that the Bank of Spain is preparing a credit rating system that would assess the solvency of nearly one million Spanish companies, allowing the Bank to analyze loans provided by banks. The aim would be to facilitate access to credit for companies that, due to their size, are not audited—a mandatory requirement for obtaining loans from the ICO (Official Credit Institute), for example. Despite Escrivá's assertion that venture capital has grown significantly and is a key driver for SMEs, the governor believes it needs further expansion to create a "much deeper venture capital market" than the current one, in order to reach European averages and, even more importantly, global levels. In this regard, he specified that venture capital accounts for 0.14% of Spain's gross domestic product (GDP), while the European average is 0.22% and the US average is 0.74%.

Finally, regarding employment, the Governor of the Bank of Spain addressed absenteeism, a major concern for Spanish businesses and a constant source of debate due to its impact on productivity. According to the Governor, one of the reasons Spain has one of the highest rates in Europe is that "the entity that pays for sick leave," Social Security, "is not the same body as the woman," which refers to the regional public health systems.