Fianna Fáil Jobs Spokesperson Dara Calleary has accused the Government of washing its hands of SMEs as new figures show the economy is being starved of credit.

The figures from the Central Bank show that lending to SMEs dropped by 6.2% last year.  Gross new lending to SMEs amounted to €1.9billion.  The outstanding amount of credit advanced to SMEs dropped by 5.5% last year, while SME non-financial credit fell by 5.1%.

“These figures show across the board reductions in all types of credit available to SMEs in all sectors last year.  It’s clear that the credit crisis is deepening, with banks restricting the working capital available to viable businesses and the Government unwilling to intervene,” said Deputy Calleary.

“The Finance Minister Michael Noonan appears to have washed his hands of this entirely.  Despite the further reduction in the availability of credit last year, the Government has seen no need to crack down on the two pillar banks and impose any lending targets this year.  While the targets over the past two years did not improve the situation, I fear the absence of any targets this year allows both Government and the banks to take their eye off the ball entirely.

“It is very clear from these figures that banks are restricting credit.  But we remain very much in the dark as to why working capital is being denied to those businesses and entrepreneurs who need it and should qualify for it.  It seems the entire focus of our pillar banks is on reducing their balance sheet, preserving capital and minimising risk.  If that remains the case, it will hold back Ireland’s recovery.

“It is not good enough for the Finance Minister Michael Noonan and Jobs Minister Richard Bruton to wash their hands of this entirely and allow banks to call all the shots, as viable SMEs are prevented from expanding and creating jobs. There is clearly an ongoing credit crisis in this country and the Government must use its teeth to tackle it.”