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Credit Availability

Dáil Éireann Debate, Tuesday - 16 April 2013

Tuesday, 16 April 2013

Questions (204)

Robert Dowds

Question:

204. Deputy Robert Dowds asked the Minister for Finance his views on banks engaging in constructive refusal of credit for small businesses by means of not replying to requests for credit; his views on whether this is a significant hindrance to job creation; and the measures he is taking to ensure that banks are not engaging in constructive refusal of credit. [16846/13]

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Written answers

The issue of constructive refusals of credit is dealt with in Statutory Instrument 127 of 2010 which contains guidelines relating to the Credit Review Office. Paragraphs 5 and 6 provide:

5. Where a decision on an application for a credit facility is not given by the participating institution within 15 working days, this shall be regarded as constructive refusal and the borrower may apply for review to the Credit Reviewer.

6. Where a borrower considers that the terms or conditions attached to a credit facility or its price are so onerous as to amount to a constructive refusal, the borrower is entitled to apply for a review. The Credit Reviewer shall issue guidance on the reasonableness of terms, conditions and pricing.

One of the most powerful ways of ensuring the pillar banks provide credit to viable SMEs is through access to the Credit Review process. I would strongly advise anyone who has been refused credit, whether by constructive refusal or otherwise, to avail of the services of the Credit Review Office.

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