Competition in Dutch SME loan market


ACM has investigated competition among banks active in the Dutch market for SME loans. ACM concludes that there is insufficient competition among banks in this market. In addition, the margin calculation has revealed that competition has decreased in recent years.

There are a number of reasons as to why banks experience relatively little competitive pressure in this market:

  1. In this market, barriers to entry in the Netherlands are high
  2. Increased capital requirements reduce the opportunities for the three major banks to exert competitive pressure on each other
  3. SMEs shop around and switch to a limited extent
  4. There is a risk of tacit coordination among banks
  5. Competitive pressure from alternative forms of financing is currently still limited

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