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Moving the bank-SME dialogue forward - Final report of the "Round Table of Bankers and SMEs"

The "Round Table of Bankers and SMEs" was set up, in September 1995, by Mr. Christos Papoutsis, Commissioner responsible for enterprise policy. Following more than one year's work, the Round Table has now presented its final report to the Commissioner.

The objective of the Ro...
The "Round Table of Bankers and SMEs" was set up, in September 1995, by Mr. Christos Papoutsis, Commissioner responsible for enterprise policy. Following more than one year's work, the Round Table has now presented its final report to the Commissioner.

The objective of the Round Table was to concentrate mainly on what the banking sector can do to improve the situation in SME financing and to identify best practices in individual Member States which could be more widely disseminated throughout the European Union.

The great majority of SMEs - around 80% - rely on bank overdrafts and loans as their primary source of funding. Add to this the fact that most of them remain undercapitalised throughout their lives, it becomes clear that a good relationship with their bank is crucial if they are to survive the difficult initial years and go on to achieve the growth which will create employment.

The Round Table has identified several areas of good practice in individual Member States which could be more widely disseminated. These include areas such as:

- Risk assessment by banks (Italy, Germany, the United Kingdom and The Netherlands);
- Treatment of high-risk clients (Ireland, Germany Italy, France and Sweden);
- Support for specific target groups (The Netherlands);
- Private risk finance (United Kingdom and Ireland);
- Incentives for successful SMEs (Portugal);
- Encouraging entrepreneurship (Ireland and the United Kingdom);
- Consultation by banks (Greece, Portugal and France).

The Round Table, in addition to identifying good practices of national interest, makes a number of recommendations for the improvement of the relationship between banks and SMEs; for the development, refinement and combination of financial products and services to facilitate the expansion of these enterprises; for reducing the legislative, administrative and fiscal burden on businesses; and for strengthening existing policies in favour of SMEs.

In his foreword to the Report, Commissioner Christos Papoutsis stresses that it "not only constitutes a valuable exchange of experience and opinion, but it succeeds in moving forward the whole dialogue between banks and SMEs, providing a firm foundation for future work".
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