35% of respondents continue to report constraints on credit availability.
Summary: Concerns about access to credit may have abated. But 1 in 4 organizations globally report ongoing challenges in obtaining the credit they need.
The global credit crunch has appeared prominently since our first report in 2008. That year it was second. In 2009, it ranked first, and last year, it ranked second again.
This year the risk falls to 10th position. Unexpectedly, however, survey respondents on average expect the impact of credit access challenges to rise once again by 2013.
Concerns about access to credit have declined across the board. In the BRICS, these risks apparently remain slightly higher — credit access generally ranks seventh or eighth.
Higher impacts of challenges relating to access to credit in the BRICs very likely reflect lower levels of financial markets development in these economies, as opposed to any lingering issues from the global credit crunch.
Despite this sharply improved picture from previous years, our survey revealed that many organizations continue to struggle to gain access to credit: 35% continued to report constraints on credit availability, while 1 in 10 report challenges obtaining capital needed for major investment programs.
Executives in the power and utilities sector are most likely to report insufficient access to credit.
By contrast, the life sciences, and oil and gas sectors are least likely to report continued challenges in addressing this risk. Despite the ongoing sovereign debt challenges facing Europe, relatively few respondents in the public sector (27%) reported immediate credit access issues.
- The banking sector — and others — expect challenges relating to credit access to rise again. In banking, this may reflect expectations of higher capital requirements and sovereign debt issues.
- The health care and life sciences sectors, where business models are challenged by efforts to control health care costs and a diminishing pipeline of blockbuster drugs, also expect a rising impact of credit access challenges.
Managing the risk
Strategies for managing credit access risks are relatively straightforward:
- Direct capital markets access
- Obtaining support from the parent company.
Roughly half (55%) of all organizations in our survey reported that their efforts to manage liquidity-related risks were reasonably effective.
- Banks were most likely to have taken such measures (nearly 70%).
- The public sector was least likely to have done so (apparently, fewer than one in four).
- Power and utilities respondents were seeing measures to manage credit access as necessary, but not yet implementing such programs.
There was substantial geographical variation in the ability of organizations to manage against credit access risk.
- The proportion of firms or government entities that felt their risk mitigation programs had enabled them to secure necessary funds — through capital markets, or via support from their parent company — was significantly higher in the US, China and the Middle East than in most major Western European economies.
- Organizations in South Africa and in Poland also report significant difficulties in managing this risk, suggesting that the availability of credit may be an important factor in (or a barrier to) future national development in some markets.
Organizations' responses to access to credit
Percentage reporting continued difficulty in accessing credit markets, by sector
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