Complaints that big banks were reluctant to lend money to small businesses have proved largely unfounded, according to a new study.

The results showed that most small and medium enterprises (SMEs) had access to credit, and that poor communication was responsible for perceived problems.

The study “The challenges in the dialogue between banks and SMEs” was published on Friday and was carried out by the State Secretariat for Economic Affairs (Seco) and several economic partners.

“We were surprised by the outcome because the very small enterprises have difficulties getting loans from banks," Peter Neuhaus, the director of the Swiss SME Foundation, told swissinfo.

SMEs make up the backbone of the Swiss economy - accounting for 99.7 per cent of the 300,000 registered businesses in Switzerland and employing 75 per cent of all workers.

The study found that, despite earlier criticisms, most SMEs now seemed to be happy with the services that they received from their banks.

It revealed that out of the 438 SMEs interviewed, 60 per cent were satisfied with their bank and only 15 per cent said that they were unhappy.

In a statement, Seco said that the main weak point in the relationship between the two sides was communication.

Loan bids

The organisation said that banks should publicise their evaluation criteria for loans more widely and added that SMEs should ensure that their loan bids were more informative and better prepared.

According to the study, SMEs said they felt that collaboration with banks had slightly improved over the past three years, although medium-sized firms - between 50 and 140 employees - seemed to be more satisfied than smaller firms with fewer than ten employees.

“The very small enterprises consisting of between one and nine people have most difficulties in getting a loan," Neuhaus said.

Seco said the research was commissioned following complaints that banks were making it difficult for smaller firms to obtain loans.

However, Neuhaus does not believe this is solely a Swiss problem.

“The banks don’t just give money to anyone if the risk cannot be assessed. No bank, no matter in which country, would grant a loan without guarantee," he said.

In May, the government launched an initiative to help improve basic business conditions for SMEs after a separate study showed that Switzerland’s major banks were increasingly reluctant to issue loans to SMEs.

Dropped

The research, carried out on behalf of cantonal banks and the Swiss government, revealed that loans by major banks had dropped by 29.7 per cent to SFr144.7 billion between 1997 and 2002.

Many SMEs, who are being hit hard by the economic downturn, have criticised the loan system as being too restrictive and say that interest rates offered by major Swiss banks are too high.

Seco said it hoped that the survey, which was a joint effort with the Swiss Bankers Association, the Swiss Business federation and the Swiss SME foundation, would add some impartiality to the debate surrounding SMEs and banks.

swissinfo with agencies

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