ISME: Lending access for SMEs "abysmal"

A new survey by the Irish Small and Medium Enterprises (ISME) found that credit conditions for its members are deteriorating despite apparent encouragement regarding the economy.
 
Its latest quarterly survey found that more than half (57 per cent) of small firms that had applied for funding in the last three months had been refused credit by their banks, compared with a rejection rate of 44 per cent in the last survey.
 
The banks have consistently rejected criticism of their SME lending policies, blaming a lack of demand on low lending levels, but these recent figures have seen ISME label access to credit as "abysmal", with "torturous" application processes.

Decision times for loan applications appeared to have increased from four to five weeks, with an overwhelming 95 per cent of respondents saying the Government is either having a negative or no impact on SME lending.
 
Mark Fielding, chief executive of the ISME, said: "Recent figures demonstrate that both rescued banks are going well beyond the Prudential Liquidity Assessment Review element of their programme, aimed at reducing the quantity of loans on their balance sheets.
 
"However, they are doing this by curtailing SME lending. Minister for Finance, Michael Noonan must demand to see the books on this element alone, as it will give the answers to questions being asked by ISME since the start of the bank bailout."
 
Other findings to come out from the survey include that only a third (35 per cent) of respondents had sought additional credit facilities in the last quarter, while 12 per cent of respondents did not apply for bank credit for various reasons.
 
ISME has called on the Government to consider setting up a strategic investment bank as well as alternative forms of finance.
 
"As was clearly demonstrated by their display in front of the Oireachtas Committee last week, the rescued banks are treating their SME customer with disdain and continue to hoodwink the Government with continuing half-truths and distorted statistics as their assertion of eight out of 10 loans granted has become a sad national joke," added Fielding.
 
"The Government and Central Bank have stood back for too long and must take action."

Date published 9 Sep 2013 | Last updated 9 Sep 2013