Nine out of 10 firms are not cred­it­wor­thy

Kathimerini English - - Focus - YIAN­NIS PAPADOYIANNIS

Al­most two in ev­ery three Greek com­pa­nies (63 per­cent) are deemed to have a high credit risk, com­pared to just 6 per­cent in 2009, ac­cord­ing to data com­piled by ICAP, as the Greek pro­duc­tion base is col­laps­ing rapidly.

Most Greek firms now have se­ri­ous or very se­ri­ous prob­lems in cov­er­ing their obli­ga­tions, along with weak fi­nan­cial re­sults and par­tic­u­larly low com­pet­i­tive­ness. This is a com­bi­na­tion which gen­er­ates ma­jor doubts about their sus­tain­abil­ity.

An­other 27 per­cent of en­ter­prises are on the verge of en­ter­ing the above cat­e­gory too, with an in­creased risk, as they show vul­ner­a­bil­ity to adverse fi­nan­cial con­di­tions, low eco­nomic per­for­mance and low com­pet­i­tive­ness.

Huge prob­lem

In other words, 90 per­cent of en­ter­prises in Greece find them­selves in the zone of high or in­creased credit risk and ac­cord­ing to bank rules should not be en­ti­tled to bank fi­nanc­ing. There­fore the credit sys­tem is up against a huge prob­lem, as in or­der to help the re­vi­tal­iza­tion of the econ­omy it will have to in­crease credit lev­els, but the com­pa­nies that are ac­tu­ally cred­it­wor­thy and ful­fill the banks’ cri­te­ria are very few in­deed.

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