The Spanish government will approve a law that will broaden the definition of small- and mid-sized companies so that more firms may be classified as such and it may become easier for them to get loans, Economy Minister Luis de Guindos said in an interview with Efe.

Granting loans to small- and mid-sized firms, collectively known as "pymes" in Spain, is advantageous for a bank because it consumes less capital than financing big companies, according to the new international regulation, Basilea III, De Guindos said.

If the concept of pymes is expanded and more companies are designated as such, it will foster the granting of loans to the real economy, the economy minister said.

Besides the number of employees, to be classified as a small- or medium-sized business a company must fall within other parameters that the Bank of Spain will establish, including business volume, which currently hinders considering a firm that bills more than 50 million euros ($67 million) to be in that category, De Guindos said.

Currently, a small business in Spain is considered to be a firm with between 10 and 50 employees and a mid-sized business to have less than 250, although business volume and the size of the balance sheet must also be considered, something that prevents some firms from being designated as such despite having less than 250 workers.

The time has come regarding credit flow, in contrast to the situation a year or a year-and-a-half ago, where Spain has a solvent bank and financial demand will grow as the economy continues to recover, De Guindos said.

With regard to nationalized banks, the economy chief said he was convinced that Novagalicia will leave state control in October and later the future of Catalunya Banc will be decided.

In the case of Bankia, De Guindos said that we will have to wait at least 18 months to begin to think about privatization, because it is "very large," but "it has a professional management team that knows perfectly what it has to do."

After its nationalization and after the European Union last September approved an injection of 4.5 billion euros ($6 billion) for the bank, Bankia approved a restructuring plan that will eliminate 4,500 jobs from its payroll and close about 1,100 branches. EFE