Frankfurt – October 29, 2026 -- Nearly 36 percent of German mid-sized companies still rated bank behavior in credit negotiations as restrictive in the third quarter of 2026, almost five percentage points fewer than in the prior quarter, according to the KfW-ifo Credit Hurdle. Lending conditions are easing, but remain tighter than the average of recent years.
Large corporates see restrictive lending fall to 27 percent
Just over 27 percent of surveyed large companies reported restrictive lending behavior by their banks. That is almost six percentage points below the previous quarter. KfW compiles the indicator each quarter from ifo Institute business survey data, broken down by company size and economic sector.
Large firms lift loan talks to 30.6 percent while SME interest sinks
Demand for credit diverged in the quarter. The share of large companies that discussed a loan with banks rose 3.1 percentage points to 30.6 percent. Only about 19 percent of small and mid-sized companies were interested in borrowing. That was a slight decline from the previous quarter and the lowest reading since summer 2021.
Reluctance to take on debt drives SME downturn
KfW Chief Economist Dirk Schumacher said mid-sized firms show a persistent downward trend in bank loan demand. Companies cite unwillingness to take on debt as the main reason, linked to economic uncertainty. Aging business owners and unresolved succession arrangements also deter borrowing, he said.
KfW forecasts 1.5 percent growth next year
Schumacher said the prospect of a more favorable economic situation is making banks view some borrowers more positively. He added that a broad loosening of lending policy would require a sustained economic upswing. KfW Research expects 1.5 percent growth next year.