The Credit Review Office, which was set up to deal with complaints about business lending by the main banks, has said the situation is improving.
Its third quarterly report issued today said AIB and Bank of Ireland were honouring commitments made in their lending plans.
The two banks have carried out 170 internal reviews of decisions on loan applications. 131 were upheld, 27 reversed and 12 are still being reviewed. The CRO itself has overturned bank decisions relating to €978,000 of credit.
The CRO report says that, although total lending has fallen, no region or industry has been disproportionately affected. It also said the banks were co-operating with it.
The Irish Banking Federation welcomed the report, but small business group ISME criticised what it called the low level of completed cases - 30, in 10 months - saying this confirmed that companies were ignoring the process. The group said its members saw the process as another layer of bureaucracy, while they also feared ruining their existing banking relationships.
The director of the Small Firms Association, Avine McNally, said the CRO report provided a balanced view of the banks lending decisions. 'However, the findings from the Central Bank in December 2010 regarding SME lending, showed that access to credit remains a huge challenge for many small firms, she added, repeating her organisation's call for a loan guarantee scheme.
Earlier John Trethowan, who heads the office, told RTÉ radio the conventional wisdom that banks are not lending may have been true 12-18 months ago, but both banks had 'reached out to the market' to say that they were open for business for viable businesses.
Reacting to criticism from ISME, Mr Trethowan said his office was working well with other groups representing businesses, such as Chambers Ireland and the SFA.
