ISME, the association representing small to medium enterprises in Ireland has accused banks of “telling lies” about the availability of credit as its own survey shows that 58 percent of small and medium sized firms were refused credit in the last quarter. The association said that, as demand for SME credit increases, the level of available finance continues to deteriorate with 64 per cent of firms saying banks are making it more difficult for SMEs to access credit.
“The results of this survey make an absolute joke of the claims of the bankers representatives and their cheerleaders in the Credit Review Office that bank lending is readily accessible but the demand for SME credit is reduced. This excuse, used to justify why the banks will not reach their Government lending targets, is utter baloney, being peddled to get the bankers off the hook from their commitments in return for their rescue by tax payers’ money,” according to ISME Chief Executive, Mark Fielding.
The survey also found that 37 per cent of firms had requested additional or new bank facilities in the last 3 months, up from 30 per cent in the previous quarter and 25 per cent in quarter 1.
It found that 64 per cent of firms said that the banks are making it more difficult for SMEs to access finance and 87 per cent of respondents are customers for over 5 years, while 41 per cent are over 20 years.
The survey also found that 93 per cent said that the Government was having either a negative or no impact on SME lending and that 16pc of companies had changes in their bank facilities in the last three months. Of those 30pc had their overdraft reduced, 39 per cent experienced an increase in charges and 28 per cent an increase in their interest rate.
“The desperation being experienced by SMEs is evident in their responses on the Government’s role, with a significant 93 per cent of companies outlining that they felt the Government had either a negative or no impact on SME lending. This is not surprising, as the bankers have been giving this and the previous Government the run around, with their spin, obfuscation and downright lies, for a number of years. In the interim, the SME sector continues to struggle, despite assurances of bank credit availability,” Mr Fielding said.
“The banks cannot take billions in rescue money from the taxpayer on the one hand and on the other threaten thousands of smaller businesses and the employment that they maintain and create. The Government must force them into lending to viable businesses or else reduce the protection from the State and the taxpayers, who have heavily contributed to their survival,” he added.
