As banks raise interest rates and tighten the credit standards for loans, the number of German companies finding it more difficult to obtain loans are rising in an economy that is likely to undergo a mild recession this year, an ifo Institute survey showed Thursday.
The share of companies in ongoing credit negotiations, who reported restraint on the part of banks, climbed to 29.9 percent in December from 24.3 percent in September, the survey found.
"Banks are gradually increasing interest rates on loans and are more reluctant to grant them," Klaus Wohlrabe, head of surveys at ifo, said.
"The era of low interest rates is over for now."
That means, many companies will have to get used to this and adjust how they structure their financing accordingly, Wohlrabe added.
by Jyotsna V
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