Bank branch closures threaten rural Sweden

The crisis of confidence in banks

Published 1 March 2024
- By Editorial Staff
38 of the country's 290 municipalities now have no bank branches at all.

38 municipalities in Sweden have no bank branches at all. Johan Grip, chief economist at Företagarna, says this is a “worrying development” that particularly affects small businesses.

Over the past 15 years, banks have closed 1,069 branches in Sweden, leaving 918, mainly in rural areas, and 38 of the country’s 290 municipalities have no bank branches at all, according to a survey by Bonnier-owned business newspaper Dagens Industri. This represents 13 percent of all municipalities and is growing, affecting many small businesses in rural areas.

– This is a very worrying development that is continuing. Wherever I travel in Sweden, small business owners testify to a sense of despondency, where closed offices and reduced interest from banks affect their business, Johan Grip, who is responsible for analyzing socio-economic issues important to businesses and entrepreneurship at the business organization Företagarna, told the newspaper.

“Maximizing profits”

Grip says there are several consequences for small businesses when the nearest bank branch is far away, including making it more difficult to get a bank loan.

– All lending is based on relationships and an understanding of local conditions, Grip says. That has been lost in many places.

Banks say this is due to increased digitalization and the fact that it allows them to provide the same service without being physically present. But Grip points out that it is more about increasing profits for the banks, and calls their actions “crass”.

– It would be more flattering if the banks could say that their actions are about maximizing profits. Instead, they want to see themselves as social institutions, which is a bit ridiculous, he says.

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