Give credit unions and CEBs more lending power - McGuinness

Fianna Fáil Spokesperson on Small Business, John McGuinness TD, says that figures released today revealing that one in four businesses seeking a loan are being rejected is further proof of the Government’s inability to get credit flowing throughout the economy.

Deputy McGuinness commented: “The figures released today just confirm what small and medium businesses throughout the country already know, banks are still not lending. The situation has become so dire that companies are not even bothering to ask for finance because they know what the answer will be.

“I find it baffling that even though the banks are being re-financed by the taxpayer they refuse to lend credit on loans they could be making money on.  The report from the Central Bank demonstrates that the high rejection rate for loans has nothing to do with the quality of applications. The Government has failed in its duty to businesses and must take action.

“The banks are failing the very people who own them and have provided the finance for them to exist. The finance that the Government provides to the banks should be withdrawn if they refuse to lend.

“Another response could be to give greater lending powers to credit unions and the County Enterprise Boards (CEB). Credit unions should be allowed to lend to businesses with finance from the NTMA. County Enterprise Boards (CEB) also need to be funded so they can administer smaller, recoverable loans for hard-pressed businesses.

“The banking sector has a virtual monopoly on business lending at the moment and if there was a facility for small and medium sizes businesses to access smaller amounts of credit at CEBs or credit unions, this could provide a much needed boost to the sector.