Minister of State with responsibility for Small Businesses John Perry is calling on bank chiefs to attend a meeting of the Advisory Group for Small Businesses to discuss how they are dealing with lending and debt problems with SMEs.
In a letter to Bank of Ireland chief executive Richie Boucher and Allied Irish Banks chief executive David Duffy, Mr Perry asked bank representatives to explain their position on funding for and distressed loans to SMEs at the next meeting of the group on June 20th.
Small business
Mr Perry said, "It is imperative that we listen to the voice of small business . . . they are crucial to the enhancement of Ireland's overall competitiveness and growth and should not be overlooked.
“Access to finance can mean the difference between survival, or failure, for many viable new start-ups and existing small businesses.” The request comes as Central Bank director of credit institution supervision Fiona Muldoon said last week 50 per cent of loans to SMEs, worth €25 billion, are impaired.
The advisory group was established by the Department of Jobs, Enterprise and Innovation to raise awareness about the problems facing 200,000 smaller businesses in Ireland and has identified access to credit as the biggest issue facing small firms.
Irish Small Medium Enterprises Association chief executive Mark Fielding said: “Banks face the difficulty that they’re not going to reduce their balance sheets if they continue to loan to SMEs, so they’re caught between a rock and a hard place.”
Mr Fielding added that commonly reported figures on the number of loans being issued to SMEs are inaccurate.
"Nine out of 10 loans are being granted loans but that is fully completed formal applications. Most SMEs don't go through a formal application, they ring up a bank manager for a chat before they approach for funds, but this isn't counted as a refusal as it isn't in the figures."
At the meeting
AIB said a representative for the bank will attend, but declined to confirm if Mr Duffy will be at the meeting.
Bank of Ireland refused to disclose if any of its representatives will attend the meeting.
