Financial institutions


A credit institution is reflected in the composition of its assets.

A credit institution is reflected in the composition of its assets.

The importance of short-term loans for German banks “Credit is as complicated as it is essential15.” Traditional collateral behavior of German commercial banks “Credit banks in the 1930s investing in medium and long term …. bank deposits.

With the contribution of these two groups, we examine how German cooperative banks, (non-cooperative) written credit banks and savings banks contribute to the long-term financing of the smaller and larger enterprises. Bank loans, in particular long-term bank loans, are frequently used in Germany by young and small enterprises. The assignment of these credits to enterprises takes place through cooperative banks, independent credit banks or savings banks.

Long term loan

Long term loan

The loans come from publicly subsidized credit programs and make up a substantial portion of all long-term bank loans to young enterprises and SMEs in Germany. We note that the private lending banks have not changed their loans to young and small businesses (we note to you the private lending banks to the young and small companies in this period I.). Since the early 1990s, they have been playing only a subordinated roll on start-up and small loans.

Cooperative and savings banks, on the other hand, positive had a strong impact. Of particular importance is the fact that the credit business of the cooperative and savings banks as similar strong proves to be strong and not significantly different. In summary, the associations, which are banks, which operate with a decentralized form of organization, but not with public property, are crucial for the observed creditactivities.

This paper examines the importance of credit unions, credit banks and savings banks in granting long-term loans to small, medium and medium-sized enterprises. These are loans from state subsidy systems, which represent a significant part of all long-term bank loans to start-ups and small and medium-sized enterprises in Germany and whose allocation directly affects the three banking groups.

The empirical analysis at the regional and enterprise level for the 1990s shows that the credit banks are not converting their loans to typically younger, small and medium-sized enterprises during this period. By contrast, credit unions and cooperatives make a significant contribution to lending to small and medium-sized enterprises. Accordingly, our results suggest that locally operating credit institutions with a decentralized form of enterprise, but not public funding, are important for the observed loans.

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