According to the latest available data, SMEs (firms that employ less than 250 employees) accounted for 99.5% of all non-financial firms in Luxembourg in 2022. SMEs employed approximately 65.3% of the labour force and generated 62% of the economy’s total value added.
New lending to all enterprises amounted to EUR 46.4 billion in 2024, of which EUR 11.4 billion went to SMEs. As a result, SME lending accounted for 24.5% of total new lending in 2024. It should be noted that the analysis relies on a new and more accurate dataset, AnaCredit, that provides a clearer picture of credit conditions in Luxembourg.
According to AnaCredit data, SME interest rates fell from 6.92% in 2023 to 5.80% in 2024, reflecting the easing of ECB policy rates.
Over 2007–2024, interest rates for SMEs remained consistently above those for large firms. Lending conditions improved in 2024, with the SME rate declining to 5.80% from 6.92% in 2023, and the rate for large firms falling to 4.64% from 4.88%. As a result, the interest rate spread between SMEs and large firms narrowed accordingly, decreasing from 2.04 percentage points in 2023 to 1.15 percentage points in 2024.
Alternative forms of financing, such as venture capital, may be important for SMEs seeking finance. In 2024, nearly EUR 60.8 million of venture capital was invested in Luxembourg’s firms. The largest portion of all venture capital funding was invested in firms active in ICT (EUR 30.6 million).
Several measures have been implemented to facilitate SME financing. On 24 March 2025 the Minister of the Economy and the Minister of Finance presented an action plan entitled “10 Action Points for Start-ups.” It introduces tax incentives to stimulate private investment in young innovative firms, expands support for deep-tech and sector-specific incubators, and develops new financial instruments to strengthen venture-capital funding. Additional measures include the creation of an AI Experience Centre and an AI Factory to accelerate the development and adoption of advanced technologies.
According to the AnaCredit dataset, government-guaranteed loans amounted to EUR 0.8 billion in 2024. This is a gradual decrease from EUR 1 billion in 2023, EUR 1.6 billion in 2022 and EUR 1 billion in 2021. During the same period, government loan guarantees to SMEs totalled EUR 0.9 billion in 2024, compared to EUR 0.7 billion in 2023, EUR 1.3 billion in 2022, and EUR 0.8 billion in 2021. These figures emphasize the countercyclical nature of these loans and highlight the government's commitment to supporting SME financing during the COVID-19 pandemic.
The government has also emphasised innovation within SMEs. In 2024, SMEs accounted for 73% of Research, Development, and Innovation (RDI) projects financed by the Ministry of the Economy.
The number of bankruptcies among all firms in Luxembourg stood at 1 163 cases in 2024, marking a 26.7% increase from the 918 reported in 2023.