Belfast Telegraph

Business chiefs hit out over credit

Business chiefs have clashed with a Government group tasked with ensuring lenders free up credit, branding it a mouthpiece for the banks.

The Irish Small and Medium Enterprises Association (Isme) dismissed claims by the Credit Review Office (CRO) of a fall-off in demand for loans from companies.

Isme chief Mark Fielding branded the assessment arrant nonsense and repeated his assertion that finance houses were refusing credit to the majority of small businesses.

Mr Fielding said: "We in the SME sector are sick and tired of the excuses constantly being issued by the CRO, rapidly becoming the main mouthpiece of the banks, justifying the refusal of the banks to provide adequate lending facilities to their SME customers.

"The reality is, and has been for a considerable period, that the banks are refusing lending facilities to the majority of SMEs and in turn are failing to meet the lending targets set down by Government."

Credit reviewer John Trethowan rejected 27 applications for review and upheld 30. His fifth quarterly report found it would be a challenge for Allied Irish Banks and Bank of Ireland to meet the target of providing 3 billion euro of credit to small businesses this year.

Mr Trethowan said: "The two banks we deal with have given us a report on the roadshows they've done around Ireland with SMEs and farms, to bring them into branches and business centres to tell people they're open for business. That would indicate to us that it's a demand issue rather than a supply issue."

He said a Government survey, due to be carried out by the Department of Finance, was needed to determine the level of demand.

The department said the Government will continue to put pressure on banks to meet their lending targets, but claimed it will not force businesses to take credit it neither needs nor wants.

"This is completely contrary to the views regularly being expressed to Isme from member companies," Mr Fielding said. "Access to credit remains one of the most significant barriers for business and the lack of credit is directly responsible for hundreds of company closures and thousands of job losses."

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