Eco&Stat n°3-2025 - AnaCredit and the OECD Scoreboard on SMEs financing: the Luxembourg experience

AnaCredit and the OECD Scoreboard on SMEs financing: the Luxembourg experience

Executive summary:

Access to finance is essential for firm creation and the growth of small and medium-sized enterprises (SMEs). For this reason, every year the SMEs and entrepreneurs financing: an OECD Scoreboard provides key indicators for monitoring firms access to finance and conditions in participating countries. In Luxembourg and the Eurozone, the indicators for the Scoreboard are typically compiled using Interest Rate Statistics (IRS). These data, however, are designed to provide information for conducting European monetary policy, rather than to monitor and analyse firms’ access to finance. For the Scoreboard purposes, IRS data have two major limitations: 1) they contain only information on loans granted by financial institutions based in the country at hand; 2) they do not contain information on firm size, so that the Scoreboard identifies SMEs receiving loans based on loan size (i.e., less than €1 million) rather than the size of the borrowing firm.

Recently, a new and comprehensive dataset, AnaCredit (Analytical Credit), has become available. AnaCredit is compiled by the ECB with the assistance from national central banks. AnaCredit is a micro-level dataset that covers the Euro Area, and provides detailed information on both lenders (e.g., residence of lending financial institute) and borrowers (e.g., characteristics of borrowing firm, such as balance sheets).

Focusing on the case of Luxembourg, this study explores the suitability of data sourced from AnaCredit for compiling the OECD Scoreboard’s main indicators. The study presents the main features of the two datasets, and compares aggregate figures for new business lending for SMEs, a key Scoreboard’s indicator derived from AnaCredit to those from IRS, focusing on the years from 2021 to 2023, the period covered by high quality AnaCredit data.

The analysis highlights the key differences between the two datasets. IRS data includes only loans issued by financial institutions based in Luxembourg, and identifies SMEs based on the size of the loan  (i.e., it assumes that loans under €1 million are granted to SMEs), a proxy commonly used in several Scoreboard countries. In contrast, AnaCredit captures loans issued by all Euro Area lenders to firms in Luxembourg, and identifies SMEs based on firm characteristics (e.g. number of employees, turnover, and balance sheet) in line with the European definition. AnaCredit also includes data on a broader range of financial instruments and loan types, for example covering fixed and floating interest rates.

Results from the empirical analysis indicate that the trends in SME financing differ significantly in the two datasets. AnaCredit data reveals that new business lending to SMEs in Luxembourg reached approximately €14 billion in 2023, representing 30% of all new business lending. This figure is substantially higher than the 12% reported by IRS. For the observed period (2021–2023), AnaCredit consistently reports a higher proportion of new business lending compared to IRS. Additionally, interest rates paid by SME calculated using AnaCredit data are consistently higher than those resulting from IRS.

The study shows the limitations of IRS for Luxembourg. SMEs play a major role in Luxembourg’s economy, as they account for approximately two-thirds of total employment and value added in the national non-financial sector. Luxembourg is also a small open economy where certain limitations in assumptions can be particularly relevant for accurately measuring SMEs access to finance. However, the analysis of this study is relevant to all countries participating in the OECD Scoreboard that rely on IRS data or similar datasets. Countries involved in the Scoreboard might consider preferring, or complementing existing sources with AnaCredit to obtain a more accurate portrait of SME financing.

In summary, AnaCredit is a highly promising dataset for monitoring SMEs financing in Luxembourg and across Europe. Despite its advantages, adopting AnaCredit data for the Scoreboard poses some challenges. Using AnaCredit instead of IRS for the OECD Scoreboard would create a break in the series, limiting comparisons of indicators before and after 2021. European countries using AnaCredit for the OECD Scoreboard should adopt harmonized methodologies to aggregate the microdata into country-level estimates for ensuring accurate comparisons across countries.