Credit mediation has played an essential role for companies in the current health and economic crisis. Over the whole of 2020, 6,332 players made use of this service, helping to preserve 77,816 jobs.
What is the role of credit mediation?
Credit mediation was set up in 2008 to help companies overcome their bank's initial refusal and find the financing they need to pursue or develop their business. It has to be said that with the crisis, banks have become reticent when it comes to credit, and obtaining a larger overdraft authorization has become difficult for companies, especially SMEs.
As a result, any company registered in the Commercial Register, whatever its size or sector of activity, that is having difficulty obtaining a loan from its bank can turn to the Credit Mediation Service to find a solution. As a reminder, this body has no administrative powers; its role is simply to bring the parties involved to an agreement.
More than 14,000 companies eligible for mediation by 2020
In 2020, 14,147 companies turned to credit mediation, representing a 14-fold increase on the number of cases handled in 2019. The 2009 record was not beaten, when 16,000 companies were helped to cope with the financial crisis.
Among these companies, a majority were refused a State-guaranteed loan, says the Banque de France in a press release published on January 26, 2021. The very significant recourse to mediation covers infra-annual evolutions in line with PGE requests.
In 2020, it was very small businesses that made the most use of credit mediation, accounting for nearly 84% of requests. SMEs were not to be outdone, with 436 cases. A peak in requests was recorded in the 2nd quarter (8,171 files) during the first lock-up period. These then fell in the 3rd quarter (2,368 files) before rising again over the last three months (2,727 files).
A positive outcome in half the cases
Not everyone who has turned to credit mediation following a refusal by a bank or credit insurer has been successful. In fact, only 50.2% of cases were settled last year , thus preserving 77,816 jobs.
Faced with the threat of a third shutdown, the EMP scheme will remain in force until June. The credit mediation agreement has also been renewed for a further 4 years, in order to "give it the means to continue to carry out its mission and to be available to companies requiring its intervention", as recently stated by the Minister of the Economy and Finance.