The implementation of Basel III is likely to
have a disproportionately negative impact on SMEs’ access to
credit, making it important to develop alternative funding methods
such as leasing.
That was the conclusion of the European
Association of Craft, Small and Medium-sized Enterprises (UEAPME),
the Association of Chartered Certified Accountants (ACCA) and
Leaseurope, following a debate on the impact of the impending
capital requirements regulation.
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The three bodies discussed how Basel III and
the European Capital Requirements Directive (CRD IV) would effect
lending to small business and considered the trade-off between
safeguarding against future financial crises and protecting the
interests of SMEs.
The groups suggested it is likely the risk
weights for SME loans will need to be revised when implementing
Basel III. They agreed funding options such as such as venture
capital, micro credit, and leasing should be further developed and
encouraged, especially given the need to strike the right balance
between financial stability and ensuring sufficient access to
finance for SMEs.
Jochen Jehmlich, managing director of Societe
General Equipment Finance Germany, who represented Leaseurope at
the Brussels meeting, said: “Leasing plays a crucial role in
financing SME’s investment, with 40% of all European SMEs making
use of this means of financing and an estimated €100bn in SME
investment financed through leasing in 2010.
“The EU implementation of Basel III should
thus be designed and applied in a proportionate manner to leasing
activities and it is vital to ensure that no unintended
consequences arise from the changes made to the credit risk
mitigation framework for physical assets under the CRD IV
proposals”.
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By GlobalDataOthmar Karas, MEP and rapporteur on CRD IV,
said: “SMEs must not disproportionately bear the cost of increased
financial regulation.”
“There is a broad consensus among the industry
and EU decision makers that risk weights for SMEs lending must be
adjusted now. The European Banking Authority must undertake its
review of the CRD IV, including appropriate risk weights, as a
matter of urgency.”
Gerhard Huemer, UEAPME’s economic and fiscal
policy director, said: “Given that loans will remain an important
source of finance to SMEs in the future, it is also very important
to explore ways to ease access to finance through alternative
financial instruments such as venture capital, leasing, private
equity, or business angels.”
