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IBF Rejects ISME Position on SME Lending

The Irish Banking Federation (IBF) totally rejects ISME’s position on SME lending as it is based on spurious research and is highly misleading.  Given the factual evidence showing that viable businesses can and are obtaining credit, IBF strongly encourages businesses seeking credit to apply to their lender with a fully-supported application.

IBF points to the factual evidence as showing the following:

  • The recent (Feb. 2011) Central Bank Review of SME lending documented significant improvements in the policies and practices employed by banks in support of their SME customers – including considerable progress on improving their SME customer engagement and in developing quality SME plans.
  • The most recent (Feb. 2011) report from the independent, Government-appointed Credit Review Office confirms that credit is being made available to businesses and that, notwithstanding the funding challenges faced by lenders, these “are not presenting as a barrier to lending to viable propositions from SMEs”.

The ISME position is notably out of line with all reliable research in this area and is certainly not representative for the SME market as a whole.  All reliable research shows that the vast majority of viable business propositions seeking credit are being supported by lenders.

The IBF encourages all SMEs requiring credit to apply to their bank and to provide the relevant supporting documentation required by the lender to make an informed decision.

To this end, the Your Business, Your Bank, recently published by the Government – and to which IBF and member banks contributed along with other stakeholders, including ISME – provides SMEs with all the relevant information about the credit application and assessment process.  The publication can be downloaded from IBF here.

According to IBF’s Chief Executive, Pat Farrell:

“Up to €14 billion in SME funding for new or increased credit facilities is being made available by banks here.  These initiatives are complemented by a range of non-financial advisory and mentoring support services.  Alone among the business representative voices, the ISME position is actually doing a disservice to small and medium-sized business in this country by discouraging credit applications.  We would continue to encourage all SMEs requiring credit to apply to their bank and to provide the relevant supporting documentation required by the lender to make an informed decision.  IBF looks forward to working with the new Government in supporting the small and medium business sector as a key driver of economic growth and prosperity.”

The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here. 

Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644         

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