BANK OF IRELAND has said that it is concerned that small and medium enterprises believe that banks are not lending.
The comments from the bank come in the wake of a report from the Central Bank, which said that Ireland has one of the highest rejection rates for loans and credit to small businesses in the euro area, second only to Greece.
Bank of Ireland’s director of Business Banking Mark Cunningham said today that earlier research suggests that SME’s are being discouraged to seek credit because of misinformation from other sources.
Referring to the Mazers SME Lending Study recently commissioned by the Department of Finance he said:
Research from the Mazers study suggests that these SMEs are forming their views from the information they receive from a wide variety of sources rather than their own personal experiences.
We agree that steps need to be taken by all interested groups, including the banks, to encourage businesses to seek borrowing if required.
Cunnigham said that Bank of Ireland’s approach and decline rates in terms of loans to businesses are broadly consistent with those outlined in the Mazers study, and that for the first six months of the year more than 80 per cent of around 33,000 applications for credit were approved:
Bank of Ireland continues to lend to viable Irish business owners and farmers, and is keen to see more applications coming from this group.
Earlier the Irish Banking Federation rejected the findings of the Central Bank report, citing the findings of the Mazers study. IBF chief executive Pat Farrell said that the earlier research had indicated that banks were lending.