francois villeroy de galhau : financing of very small enterprises ( vses ) introductory speech by mr francois villeroy de galhau, governor of the bank of france, at the symposium on the financing of very small enterprises ( vses ), organised by the bank of france in conjunction with the federation of approved management centres, paris, 15 january 2016. * * * ladies and gentlemen, welcome to the banque de france for this symposium on the financing of very small enterprises or vses. it was conceived and organised in conjunction with the federation of approved management centres, and i would like to extend my warmest thanks to them, and in particular to their president yves marmont. i am very pleased to have developed such a close and lasting relationship with your organisation, which plays a vital role in supporting smes and vses. this event would also have been impossible without the help of the individuals and organisations who have agreed to take part in our three round tables today, and i would like to thank them sincerely for their contribution. it is a particular pleasure for me to be able to open this symposium today. as you know, just a few months ago, i had the honour of submitting a report to the prime minister on the financing of business investment, the first proposed recommendation of which was to “ improve access to credit for very small businesses, especially cash loans ”. this is our focus today. although my role has changed since then, my belief in the fundamental importance of this issue remains the same. indeed, my conviction has been reinforced by the banque de france ’ s own commitment to supporting vses, both at a central level and through its local presence in france ’ s regions. one of the main advantages of this nationwide network is that it makes it easier to listen to and support local businesses, the majority of which are clearly vses. through its local branch network, the banque de france is responsible for dealing with credit mediation applications. it provides valuable insight for economic and social actors by publishing statistics on vses, and is the only central bank in the eurosystem to publish data in this level of detail. in addition, the banque de france conducts studies into vse finances and their positioning in the french economic landscape. clearly, this symposium is not just a one - off event reflecting a passing interest in a subject that ’ s currently in the spotlight. in fact, it is part of an ongoing and enduring initiative, and will provide additional impetus to

terms of access to credit and willingness to apply for loans, well ahead of the other major countries in the euro area. interest rates on loans are also lower in france than anywhere else in the euro area – by around 1 percentage point in the case of individual loans of up to eur 250, 000. with regard to today ’ s topic, however, there are a number of important distinctions that need to be made. access to credit is markedly more difficult for vses than for other smes : – fewer than 60 % of applications for cash loans were accepted ( i. e. granting of 75 % or more of the requested amount ) in the third quarter of 2015, compared with 74 % for smes. of course we need to take into account the fact that smaller companies have potentially weaker finances, but this is clearly something that needs to be watched closely ; – outstanding loans to vses were up 2. 8 % year - on - year at the end of the third quarter 2015, whereas cash loans only rose by 1. 1 % over the same period. equipment loans to vses also grew by just 1. 3 %, as facilities in this category are mainly used to buy property, which is clearly less likely to enhance productivity or competitiveness. evidently, things are proving more difficult for vses, and the sentiment on the ground seems to confirm this. it is in everyone ’ s interest – both the banks ’ and the business community ’ s – that we resolve this contradiction regarding credit : between the banks ’ ostensible commercial ambitions on the one hand, and the continuing failure to fully meet vses ’ demand for loans. it is therefore important that we improve vses ’ access to financing. i would like to propose three main focuses for action : the first concerns the banks, the second the banque de france, and the third vses ’ business customers. 1 ) first of all, it is absolutely vital that – at the very least - the five fitting commitments made by banks to improve dialogue with vses and smes, which were set out at the end of the excellent report drafted by the observatory for business financing in the summer of 2014, be fully implemented. let me briefly remind you of these : bis central bankers ’ speeches – respond to all requests for financing within 15 working days of submission of the completed application. this commitment appears to have been met in 90 % of cases, 1 which is commendable ; but the remaining 10 % still amounts to 100,