Central Bank Report Must Be ‘Wake Up Call’

Deputy Michael Lowry has slammed the Government for failing to take action to tackle the continued lack of support for small and medium enterprises from the banks, as highlighted by a recent Central Bank Study.

Deputy Michael Lowry has slammed the Government for failing to take action to tackle the continued lack of support for small and medium enterprises from the banks, as highlighted by a recent Central Bank Study.

The Independent T.D. for North Tipperary declared that the on-going lack of credit is crippling our businesses and resulting in closures daily and multiple job losses. Deputy Lowry explained that research from the Central Bank has proven the experience of countless businesses by confirming that Ireland is second only to Greece in the Eurozone for rejecting applications for SME loans and overdrafts. In this country one in four applications for a loan are rejected compared to one out of twenty eight in Germany. The study also indicated that Irish businesses are no longer even seeking credit where it is required as they believe the result will be a foregone conclusion.

Deputy Lowry explained;

“Time and time again we hear of enterprises being forced to close their doors as they continue to be put under pressure due to the poor domestic economy. When we open the papers or look at the news we are faced with a litany of closed businesses and lost jobs. As the days pass more of these businesses are being lost in rural towns and villages. The boarded up and closed shops in town centres are a sight that I’m sure are familiar to everyone. All too often these closures are not a reflection on the viability of the business but rather a reflection on the impossibility of continuing to trade in this challenging environment and the lack of support from banks or at governmental level.”

“Our small and medium enterprises are being devastated by the lack of support and the severely limited availability of credit. As a business owner and whilst travelling through the constituency I am frequently told that the major obstacle facing these businesses is the difficulty in accessing short term credit. Many viable and valuable businesses simply need short term credit to tide them over during difficult times. Where this credit is not forthcoming these businesses are placed in an impossible predicament and many are forced to close, resulting in the loss of valuable local jobs.”

“Businesses in Ireland are completely disillusioned with the banks and have come to a stage whereby they no longer see the point in applying for a loan, despite their need for credit, as they know it will be refused. Month on month, year on year they have been calling out for assistance and complaining of meeting a brick wall when approaching the banks. To add insult to injury the banks have been continuously pedalling the line that borrowing is continuing and they are there to assist businesses. This is not reflected in reality and not the experiences of small and medium enterprises, an experience which has now been proven by this central bank study.”

“It is unacceptable that the Government has stood idly by whilst the bailed out banks have turned their banks on businesses. It is clear that that the market has failed to adequately provide credit to viable businesses and yet we have seen no intervention at Governmental level and a complete unwillingness to engage with this issue. The Government have now been handed irrefutable evidence of what businesses have been reporting. Lending is simply not happening to the required extent. It is time for the Government to ensure that banks return to the basics and re-engage with businesses to ensure that viable business receive the support they need. Banks need to be equipped to examine the viability of businesses and must take this into account in making a determination on a loan application.”