The Credit Review Office says banks are continuing to lend to low to medium risk businesses while rejecting other “bankable propositions” because they “may not ‘tick all the boxes’.”
In his latest report, Credit Reviewer John Trethowan says that credit conditions for small business remain tight, while bank lending policies and criteria often hinders otherwise sound credit applications.
He urged banks to work with businesses to help improve their proposal and said he expects banks to ensure adequate finance is available to viable companies.
In the three years since the Credit Review Office was set up, it has found in favour of 55% of borrowers' appeals, resulting in €18.5m in credit being made available to SMEs and farms, with 1,521 jobs protected or created.
Mr Trethowan said pressure on lending is increasing because of the reduced number of banks servicing the SME market.
However he said his office is seeing more appeal requests relating to credit for working capital and investment, which suggests improved confidence in the Irish economy.
He also said that economic activity is “recovering fastest around the major cities” but remains “very challenging” in other areas.
Both AIB and Bank of Ireland have been given targets of €4 billion of SME lending by the end of the year, which Mr Trethowan says they are on-track to achieve "assuming the pattern of previous years of a strong Q4 performance is repeated."
