The latest report on lending to small businesses shows that the total amount lent by banks in the final three months of last year fell again.
Mazars, which carried out the report, said total lending by the five banks involved in the study was €32.3 billion at the end of last year. This was a fall of 1.2% compared with the previous three months and a 3.6% drop from the same period a year earlier.
The five banks surveyed were AIB, Bank of Ireland, Anglo Irish Bank, National Irish Bank and Ulster Bank.
The report said the number of applications for credit from small firms picked up slightly in the three-month period, rising by 3% from Q3, but this is still down almost 17% from a year earlier.
Mazars estimated that 16% of loan requests from small businesses were refused, compared with 18% in its last report. The banks' systems recorded a refusal rate of 12.5% but Mazars adjusted the figure upwards because of what it describes as limitations in banks' systems and processes.
It said it was unable to make any meaningful analysis of firms' enquiries for credit, as the banks generally do not keep records of these. Mazars also referred to a 'lack of clarity and consistency' across banks as to what represents an informal credit request or enquiry.
SMEs drew down just over €1 billion in credit in the period. This was an average of €356m a month, down from €377m a month in the previous survey.
Mazars also found that 35% of SMEs were more than 30 days behind in their loan repayments. The percentage of loans more than 90 days overdue jumped from 8% to 13%.
The director of the Small Firms Association, Patricia Callan, said the report clearly shows that access to credit continued to be problematic. She said the 16% refusal figure 'does not include the number of informal enquiries that are stopped at branch level and never make it to the formal application stage'.
The Irish Banking Federation said the increase in credit applications compared with the third quarter was positive. Chief executive Pat Farrell said the IBF remained committed to working with the Government's lending initiatives such as the Credit Supply Clearing Group and the independent Credit Review Process.
