ISME report proves Govt abandonment of SMEs – Senator

 

Small SMEs in Donegal being hit hard by Banks

 

Fianna Fáil Senator Brian Ó Domhnaill has said a new report showing more and more small businesses being turned down for credit is further proof of a deepening credit crisis in this country.

The ISME figures show that 54% of credit requests from SMEs are being turned down by lenders. That’s up 4% in just three months. It comes after a Central Bank report published last week revealed that lending to SMEs dropped by 6.2% last year.

“It is clear from these figures and from the recent Central Bank report that the economy is being starved of credit,” said Senator Ó Domhnaill

“This is further proof of a deepening credit crisis in this country. Viable businesses are being refused credit by banks that are focused solely on preserving capital and minimising risk. They are being prevented from expanding and creating jobs in communities across the country. The lack of support available to SMEs is forcing many to lay off staff or close their doors entirely.”

“The Government has completely washed its hands of the situation. It isn’t even subjecting the pillar banks to lending targets this year. Even with lending targets last year, there was a 6.2% reduction in the availability of credit. Now that the Government has given the pillar banks free reign, the situation is likely to get far worse this year.”

“This will seriously impede our economic recovery. The banks remain totally focussed on their own balance sheets and are showing no intention of improving their relationship with the SME sector. With nearly 70% of workers in the private sector currently employed by SMEs, the Government simply cannot afford to take its eye of the ball.”

“In his recent much reported comments, economist Morgan Kelly attacks the Government for its lack of policy on SMEs. He says ‘the current government essentially boasts about its lack of policy’ and is taking ‘purposelessness to a high art’. It is clear that the situation can no longer be ignored.

“This requires urgent Government intervention. I am urging the Finance Minister Michael Noonan and Jobs Minister Richard Bruton to ensure that the State supported banks, which have a responsibility to the taxpayer, are forced to start playing ball by supporting viable small businesses.”; Concluded Ó Domhnaill

Posted: Mar 12, 2014     |     Categories: Uncategorized