Skip to main content
Normal View

Credit Availability

Dáil Éireann Debate, Wednesday - 17 April 2019

Wednesday, 17 April 2019

Questions (94, 102)

Bernard Durkan

Question:

94. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which working capital is being provided by the various lending institutions for the farming and business sectors with particular reference to the need to ensure the ability of productive sectors to have ready access to competitively priced credit; and if he will make a statement on the matter. [18031/19]

View answer

Bernard Durkan

Question:

102. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which each of the main banks have facilitated the borrowing requirements of the construction sector in the past 12 months; if each are performing adequately in this regard; and if he will make a statement on the matter. [18041/19]

View answer

Written answers

I propose to take Questions Nos. 94 and 102 together.

As the Minister for Finance I have no function in the commercial decisions of banks, however it is Government policy to ensure there is an adequate supply of credit, including working capital, to all viable SMEs and Farms.

The Central Bank of Ireland collects data on bank lending by NACE sector, and collects gross new lending drawdown data for SME lending by NACE sector. Lending for farming is captured in the ‘primary industries’ sector.

The following table shows the outstanding stock of lending at end Q4 2018 to enterprises of all sizes (SME and Large enterprises) engaged in the primary industries, construction, and business and administration sectors, as well as for all the remaining non-financial sectors, and the total non-financial lending amount. The outstanding stock of lending to SMEs only engaged in these five sectors is also shown in the second column. The final column contains data on total gross new lending to SMEs for these five sectors during all of 2018.

 

Total enterprise (SME & Large) lending   outstanding stock (€m)

SME lending outstanding stock

(€m)

SME gross new lending drawdowns during 2018

(€m)

Primary industries

3,990

3,449

824

Business and administration

4,037

1,164

343

Construction

683

442

199

Other Sectors (Ex-FI)

34,166

18,330

3,947

Total (Ex-FI)

42,875

23,385

5,313

The source of this data are table A.14 (SME & large enterprise) and A14.1 (SME) located on the Central Bank of Ireland Statistics page.

To continue to monitor levels of working capital available to SMEs, my Department conducts biannual surveys looking at demand for credit by SMEs.  The most recent Department of Finance SME Credit Demand Survey, covering the period April to September 2018, shows that, when pending applications are excluded, 88% of credit applications to banks were approved or partially approved. 

Of the 20% of SMEs that applied for credit in the 6 months to September 2018, 38% cited working capital/cash flow requirements as the main reason they were applying for bank finance.  When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 85% of working capital coming from this source, up 4% since September 2017.

Supporting the availability of finance for SMEs, including smaller enterprises, is a cornerstone element of Government policy in our efforts to strengthen the economy and create jobs.  Government is focused on ensuring that all viable SMEs, operating in all sectors, including construction, have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.

Top
Share