Small and medium-sized enterprises (SMEs) form the backbone of the business community, accounting for a large share of value added and employment.
The Italian economy experienced modest growth in 2023, marking a significant slowdown compared to the previous year, partly due to the waning recovery in activities most impacted by the pandemic and the tightening of monetary conditions. GDP growth remained moderate throughout 2024 and into the first months of 2025, supported by the continued positive trend in consumption and construction spending.
Financial market conditions were mainly affected by the gradual easing of monetary policy tightening throughout 2024; since the autumn, they were also impacted by geopolitical and trade tensions, heightening uncertainty regarding the macroeconomic outlook.
The decline in bank lending to SMEs deepened during 2023 and 2024, amid sluggish credit demand. The drop was much more moderate for large firms, nearly coming to a halt in the early months of 2025.
Lending standards continued to tighten in 2023 and much of 2024, reflecting lower risk tolerance and heightened risk perception. The easing of credit supply policies, primarily observed from the final quarter of 2024, mainly benefited large firms. After the spike in 2023, business borrowing rates edged down in the following year; collateral requirements held stable and low by historical standards.
Credit quality remained good. The ratio of SME new non-performing loans to outstanding loans rose slightly in 2024, but the overall quality of the assets held by banks remained virtually unchanged. The stock of non-performing loans declined further.
Early-stage financing for SMEs experienced a modest rise in 2024, following the steep drop of the previous year. Conversely, the upswing in expansion capital observed in 2023 was replaced by a moderate decline, affecting both SMEs and, to a greater extent, large enterprises.
Business-to-business payment delays, which had been declining after the increase recorded during the pandemic, reached a new low in 2024. The decrease was more pronounced for micro firms than for large enterprises, while remaining virtually unchanged for SMEs.
After the decline observed in 2022, the number of judicial liquidations rose in the following two years, reaching a level still significantly lower than that recorded in the ten years preceding the pandemic. This trend may have been driven by the increased use of debt restructuring tools, encouraged by some provisions of the new Business Crisis and Insolvency Code.
Financial support measures continued to help small businesses face the challenges caused by the increased volatility surrounding macroeconomic trends.
Credit guarantee schemes have traditionally played a key role in easing SME access to finance. A temporary framework for loans backed by the Central Guarantee Fund was introduced for 2024, based on more favourable conditions than those in place before the pandemic, but less advantageous than those implemented after the outbreak of the conflict in Ukraine.