In 2023 and 2024, the Greek economy maintained its positive momentum, solidifying the recovery that began in the aftermath of the COVID-19 pandemic. Real GDP increased by 2.3% in 2024, supported by private consumption, investment co-financed through the Recovery and Resilience Facility (RRF), and strong performance in exports and tourism. This macroeconomic context contributed to favorable conditions for business activity across various sectors, reinforcing investor confidence and market dynamism.
This economic upturn coincided with renewed business lending activity. In 2024, total new business lending reached EUR 23.97 billion, the highest since the pandemic. SME lending rose to EUR 5.94 billion, up 25.15% from 2023. However, this increase was lower than that for larger firms, resulting in an SME share of 24.8% in total new loans - higher than in 2022 (20.5%) but still below 2021 (28.4%). This reflects the uneven pace of credit recovery among different enterprise sizes, with small businesses still facing notable hurdles in accessing finance.
Despite higher loan flows, total outstanding business credit remained below pre-pandemic levels. At the end of 2024, it stood at EUR 74.3 billion. This reflects banks’ cautious lending practices and still-modest demand from smaller firms. Lending institutions remained prudent, assessing credit risk more conservatively and prioritizing clients with stronger balance sheets or stable cash flow histories. Microenterprises, in particular, often refrained from borrowing due to high interest costs and uncertain business conditions.
Non-performing loans (NPLs) for SMEs dropped to 3.98% in 2024, from 7.65% in 2023, signifying an improvement in the quality of SME loans. and over 40% since 2015. The “Hercules” asset protection schemes played a key role in this clean-up. These initiatives allowed banks to securitize and offload problematic exposures, thus freeing up capital and improving financial system resilience. Overall, business NPLs also declined, supporting the stability of the banking sector and enabling more targeted lending.
Meanwhile, interest rates remained high and well above historical norms. The average rate for SME loans fell slightly to 5.7% in 2024, from 5.96% in 2023, while large firms borrowed at 5.44%. Tight monetary policy from the European Central Bank, in response to inflationary pressures, contributed to persistently elevated borrowing costs. These conditions continued to restrict the affordability of credit, particularly for firms in sectors with lower profit margins.
According to the ECB SAFE survey, SME access to finance improved modestly. Only 9.86% of SMEs were asked to provide collateral in 2024, down from 22.56% in 2023. The loan rejection rate fell to 15.79%, from 19.24% the previous year. Still, challenges persisted, especially for micro and young firms, due to procedural complexity and limited negotiation power. Some SMEs reported difficulty navigating the application process, while others lacked the documentation or financial statements typically required by lenders.
Public support continued to play a vital role. Government guarantees for SME loans reached EUR 4.16 billion in 2024, focusing on small enterprises and investments in digitalization and green transition. These guarantees, often co-financed by the RRF, reduced credit risk and improved access. Concurrently, programs administered by the Hellenic Development Bank targeted key priority areas such as energy efficiency, digital upgrades, and regional entrepreneurship. The evolution from emergency COVID-19 support to more structured investment incentives marked a shift in national SME finance policy.
Alternative finance sources gained limited but notable ground. Venture capital investment rose to EUR 555 million (+21.98% from 2023). Factoring volumes reached EUR 3.716 billion, up from EUR 3.225 billion, while leasing and hire purchase activity hit EUR 2.744 billion. However, non-bank finance remains underdeveloped in Greece compared to EU averages. The market for equity-based and hybrid instruments is relatively small, and awareness among SMEs of available alternatives remains low. Encouraging broader diversification of funding sources remains a long-term policy goal.
In the post-pandemic period, Greek authorities continued to support SMEs through a combination of national tools and EU-backed financial instruments. The RRF played a key role in boosting liquidity and offering guarantees to SMEs, particularly in areas such as green transition, digitalization, and innovation. Through partnerships with the Hellenic Development Bank and the European Investment Fund (EIF), public guarantee schemes were reinforced and adapted to the needs of micro and small enterprises. Regulatory reforms were also introduced to simplify credit access and reduce administrative burdens, though SMEs continue to face barriers such as high collateral requirements and increased borrowing costs.