BUSINESS REACTION:BUSINESS LOBBY groups cautiously welcomed Government plans to have the banks lend €12 billion to small and medium-sized enterprises (SMEs), but warned that such firms still face difficulty getting much-needed credit.

The Irish Small and Medium-sized Enterprise Association (Isme) welcomed yesterday’s announcement, but said it was concerned credit may not be available to all viable firms in all sectors.

Isme chief executive Mark Fielding said the two banks involved, AIB and Bank of Ireland, must not be allowed to cherry pick the sectors to which they will lend. He warned that all viable but vulnerable firms should get credit.

“Today’s announcement must be accompanied by a commitment to treat all enterprises fairly and an acknowledgement of the interdependence within the SME sector,” he said.

Mr Fielding said businesses focused solely on the domestic market should not be abandoned in favour of exporters.

The Small Firms’ Association (SFA) said it was vital for Government to intervene and share risk with the banks, who otherwise will not change their lending criteria.

The SFA said the Credit Review Office’s report, also released yesterday, provided a balanced view of bank lending policies. The organisation stressed that if immediate action were taken on its findings small business would get greater access to capital.

However, Isme said three out of four companies are not aware of the existence of the office.