BANKS IN IRELAND have loaned just €3 million to small firms specialising in scientific research and development since 2010, according to figures from the Irish Central Bank.
In response to a parliamentary question, Finance Minister Michael Noonan said that last year the drawdown of new lending by non-financial SMEs from credit institutions in Ireland was €587 million in the first quarter of this year. However figures from the Central Bank show that none of this money has been loaned to businesses in the area of scientific research an development.
Mark Fielding, chief executive of he Irish Small and Medium Enterprise Association told TheJournal.ie that many businesses in this area were discouraged from applying for loans because Revenue was being so strict.
“Almost 90 per cent of these SMEs who applied to Revenue for a tax break were audited,” he said. “People naturally started to pull back. Of course, Revenue have to be strict but they didn’t make it clear that they would be so strict and people were running the risk of not getting the break because they hadn’t dotted an ‘i’ or crossed a ‘t’”.
“The government talks a lot about SMEs being the backbone of our economy but the reality is that they haven’t a clue and there’s a real lack of concrete effort on their behalf,” he said.
Speaking to TheJournal.ie, Alan Hobbs of Enterprise Ireland said that businesses tend to look to funding programmes outside of banks when it comes to research and development.
“They tend to come to places like Enterprise Ireland for this and then go to bans for more traditional banking products,” he said. “If you want to invest in R&D, it can be more difficult to have a business case for it because there’s a higher risk. We are more open to taking more risk with start-ups because we have a government mandate.”
He added that Enterprise Ireland had provided €84 million in R&D funding last year to businesses working in science and technology infrastructure sectors.
In the last three years, the SME sectors that have received the most credit from banks were agriculture and property investment and development receiving around €1.86 billion and €1.6 billion respectively. The total amount of money loaned to SMEs is more than €11.4 billion since 2010.