A new report has concluded that there is no business case for the State to establish a public banking system in Ireland.
The report on community banking in Ireland was published by Indecon International Economic Consultants for the Department of Finance.
The new report supported the outcome of a previous one published by the Department of Finance and the Department of Rural and Community Development in 2018.
Because of the extensive provision of banking services, as well as a wide range of Exchequer funded existing supports, Indecon said there is no case for the establishment of a new State owned banking network.
It also said that credit unions are considered to be a "community bank" with an increasing offering of financial products for their members.
Indecon also noted that An Post is increasing its financial offerings and there is a significant network of post offices in areas where there is no bank branch within 5km.
The report found that a small percentage of SMEs are discouraged from applying for loans for reasons such as a perception that banks are not lending.
But it added that the majority of SMEs that did not apply for credit did not do so because they did not need it.
Indecon also said that there are a wide range of existing state supports to assist SMEs, including the Brexit Loan Scheme, the Future Growth Loan Scheme, the Local Enterprise Offices, Microfinance Ireland and Enterprise Ireland.
The Indecon report contains a number of recommendations including reducing the financial exclusions and managing of existing information by credit unions, An Post and Local Authorities as well as enhancing competition.
The consultants also recommend leveraging the role of state supports for SME infrastructure to address market gaps, enhanced responsibility for commercial banks and building up new skills.
The Minister for Finance Paschal Donohoe said he carefully consider the recommendations contained within the report, in conjunction with his Government colleagues.
"The Government remains fully committed to supporting the SME sector, and this report recognises the supports the State has in place to assist them," Mr Donohoe added.
