Small and medium-sized businesses are visiting bank branches less and less frequently.

Either they don't need external financing or they use digital services: Owners of small and medium-sized enterprises are visiting their bank or savings bank branch less and less frequently.

This article is part of the special topic Banks and loans: What tradespeople need to know

Before the wave of digitalization and the COVID-19 pandemic, medium-sized companies visited their local bank or savings bank branch several times a year. Today, visits are often limited to just one appointment per year, reports KfW. In 2024, for the first time, less than half of all companies—47 percent—attended at least one business meeting at a bank or savings bank branch. Three years earlier, the figure was 50 percent, and in 2017 it was 65 percent.

In absolute numbers, this means that 1,8 million small and medium-sized enterprises (SMEs) visited a bank or savings bank branch in 2024, 60.000 fewer than in 2021 and 620.000 fewer than in 2017. Companies that did visit a branch visited it an average of 3,15 times. These are the findings of a special analysis. KfW SME PanelFor this purpose, small and medium-sized enterprises from all sectors of the economy are surveyed.

Companies forgo bank financing

There are several reasons for the decline in branch contacts. "The willingness of small and medium-sized enterprises (SMEs) to undertake investments at all has stagnated for many years. When companies do make investments, they increasingly forgo bank financing. As a result, they also need contact with credit institutions less frequently," he says. Dr. Dirk Schumacher, Chief Economist of KfW. 

Furthermore, banks and savings banks are increasingly offering digital services, which companies are also demanding. This eliminates the need to visit branches.

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Schumacher cites the decline in bank branches as another reason. Since the turn of the millennium, banks and savings banks have closed 69 percent of their branches. This includes branches as well as external offices with self-service terminals and additional personal consultation options.

16,7 minutes from the company headquarters to the nearest branch

For medium-sized businesses, reaching a branch has become somewhat more time-consuming, but the additional effort is moderate. In 2024, a medium-sized business owner needed an average of 16,7 minutes to travel from their company headquarters to the nearest branch; in 2021, it was 15,5 minutes. Differences between city and country The differences are small. In the city, companies needed an average of 16,5 minutes, while in rural areas it took 17,1 minutes.

The Range between the federal states However, the distance is greater. Particularly in the eastern German states, companies have to travel significantly longer distances to the nearest bank branch. In Mecklenburg-Western Pomerania and Brandenburg, it's almost 23 minutes, while in Bremen it's just over 13 minutes, and in Hamburg and Bavaria, it's a good 15 minutes.

Source: KfW

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