New bank credit report shows lending to small firms is improving
Lending to small firms by the country’s two main banks is improving, according to the second quarterly report from the Credit Review Office (CRO) published today by the Government.
The credit reviewer has analysed 19 applications for loans to small firms and told the country’s two main banks that credit should have been given in five of them.
John Trethowan agreed with the bank in 12 of the 19 applications reviewed since the CRO was set up at the start of April, sided with the borrower in five cases and considered that more work was required of the borrower and the bank in two others.
The report shows that the two banks covered under the Government’s recapitalisation plan, Allied Irish Banks and Bank of Ireland, have processed 114 internal reviews of decisions on loan applications.
Of those, 86 were upheld, 20 were reversed and eight are still being reviewed.
The CRO independently adjudicates on appeals from small and medium-sized enterprises (SMEs) which were refused loans by the two banks and offers an opinion on whether the decisions were justified.
Finance Minister Brian Lenihan and Enterprise Minister Batt O’Keeffe said the CRO’s second quarterly report showed encouraging signs of progress on credit lending for small businesses.
Minister Lenihan said it is vital that the banking system supports economic activity and that the banks actively support the SME sector.
