Minister imposes commitment to SMEs as with measures to stabilise banking sector–Fitzpatrick

Fianna Fail TD for Kildare North and Convenor of the Oireachtas Enterprise Committee, Michael Fitzpatrick has welcomed the news that the Minister for Finance is imposing specific lending targets for SMEs on the AIB and Bank of Ireland as the measures to recapitalise the banks and transfer loans to NAMA is announced.

“The provision of credit to viable businesses has been a very serious concern for this Government. Local businesses, particularly SMEs are vital local employers and have an essential role to play in our economic recovery.”

“In recent times SMEs have seen their credit dry up and found it increasingly difficult to secure loans from their banks. It is essential that viable businesses are supported and the banks need to lend more.”

“As part of his solution to stabilise the banking sector, the Minister for Finance has imposed lending targets on AIB and Bank of Ireland. Both banks will have to lend not less than €3 billion each for new or increased credit facilities to SMEs in both 2010 and 2011.”

“Both banks will also have to make €20 million each for Seed Capital to Enterprise Ireland supported ventures and will each set up a fund of up to €100 million for Environmental, Clean Energy and Innovation projects.”

“The banks will also be required to commit resources to work with Enterprise Ireland and the Irish Banking Federation to develop expertise in modern growth sectors and develop new credit products where cashflow is the basis for lending rather than property.”

“AIB and Bank of Ireland need to submit their plans for lending to the Government’s Credit Reviewer. These plans need to take into account a geographic and sectoral balance and will be submitted within 6 weeks to ensure a speedy commencement of lending to hard pressed businesses.”

“It is only right that banks who will benefit from recapitalisation play their part in supporting SMEs, fuelling the economy and creating employment,” concluded Deputy Fitzpatrick.