Dáil Éireann Debate, Thursday - 28 February 2013
98. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the various lending agencies have increased their lending in line with growth projection requirements; and if he will make a statement on the matter. [10923/13]
View answer99. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which any initiative has been taken by the banking sector with a view to meeting the ongoing credit requirements in the business, retail and commercial sectors; if lending in these areas is in line with economic requirements; and if he will make a statement on the matter. [10924/13]
View answer101. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which individual banks within the banking sector are making an effort to meet the credit requirements of business with the objective of encouraging economic growth; and if he will make a statement on the matter. [10926/13]
View answerI propose to take Questions Nos. 98, 99 and 101 together.
The Government recognises that SMEs are the lifeblood of the economy and will play a vital role in the recovery of employment growth in our country. One of the key priorities of the Programme for Government is to ensure that an adequate pool of credit is available to fund SMEs in the real economy during the restructuring and downsizing programme. Details of lending by the individual banks are commercially sensitive but the Central Bank does publish information on Credit Advanced to Irish Resident Small and Medium Sized Enterprises. This is available at http://www.centralbank.ie/polstats/stats/cmab/Documents/ie_table_a.14.1_credit_advanced_to_irish_resident_small_and_medium_sized_enterprises.xls.
The Government has imposed SME lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion in 2012 and €4 billion in 2013 for new or increased credit facilities to SMEs. As the Deputy may be aware, the Credit Reviewer said in his most recent quarterly report that “Both banks have achieved their €3.5bn SME loan sanction targets. Over €8bn was sanctioned in 2012; of which approx. €2.5bn (27%) is new lending drawn down.” According to the Credit Review Office, the balance of the sanctioned lending represented restructured or refinanced credit to SMEs. The Credit Review Office in the past has noted that this is important in terms of sustaining the businesses and the associated jobs.
One of the most powerful ways of ensuring that the pillar banks provide credit to viable SMEs is through access to the Credit Review process. The Credit Review Office can review decisions by the pillar banks to refuse, reduce or withdraw credit facilities, including applications for restructured credit facilities, from €1,000 up to €500,000. The Credit Review Office is currently overturning 55% of the refusal decisions referred to them and anyone eligible who has been refused credit by the banks should avail of the services of the Credit Review Office.
In addition to the lending targets imposed on the banks, the pillar banks are required to submit their lending plans to the Department and the Credit Review Office (CRO) at the beginning of each year, outlining how they intend to achieve their lending targets. The banks have submitted their lending plans for 2013 to my Department. My Department, in conjunction with the CRO, has analysed the plans and we have begun our meetings with the banks to discuss the plans. The banks also meet with the Department of Finance and the CRO on a quarterly basis to discuss progress. The monthly management meetings with the pillar banks also provide a forum for the issue of SME lending to be raised by the Department.
