Fianna Fáil Spokesperson on Jobs and Enterprise Willie O’Dea has said that the latest Department of Finance survey on access to credit for SMEs is not reflective of the reality of small businesses on the ground.
Deputy O’Dea said: “Fine Gael and Labour have been in power for almost a year and a half now and they have singularly failed to make banks increase their lending. Despite endless promises and continuous spin, the reality is that small businesses are being squeezed by banks more concerned with balance sheets than jobs.
“The Department of Finance’s latest survey fails to take into account the fact that it simply could not interview the many small businesses which have shut down due to a lack of credit. The interviewers should have contacted the same set of businesses from the previous survey.
“It also flies in the face of the Central Bank’s research on lending to small businesses. In February, they published a paper which found the banks had withdrawn €2.4bn in credit to SMEs by closing credit facilities.
“Even though bank deposits are stabilising and the banks are getting access to critical finance from the ECB, the banks are still being far too rigid and inflexible. Calculations on credit being made available to business are based on credit approvals, rather than actual credit drawdowns, and take account of the restructuring of existing loans, as opposed to the provision of new credit facilities.
Deputy O’Dea concluded: “Fianna Fáil recently put down a Private Members Motion in the Dáil calling on the Government to change the basis of measuring the lending performance of banks accordingly. The credit approval measure has shown itself to be open to manipulation by the banks. The key test is the amount of new credit drawn down by SMEs and put into circulation in the economy and this is the measure that should be used.
“Sadly, this Government voted the motion down, and small businesses continue to suffer as a result.”