Tuesday, 17 December 2019

Questions (136)

Robert Troy

Question:

136. Deputy Robert Troy asked the Minister for Finance the data in each of the years 2014 to 2018 and to date in 2019 for SME bank finance applications which required some form of collateral; the proportion of such applications which required a personal guarantee from the business owner; and the proportion of applications which required collateral in the form of a property of the business or other forms of collateral, in tabular form. [53287/19]

View answer

Written answers (Question to Finance)

The Central Bank of Ireland or the Department of Finance does not collate and publish loan level data.

However, my Department, closely monitors developments in the SME credit environment, including the level of SME applications for credit that required some form of collateral and the type of collateral sought by the bank, through its biannual SME Credit Demand Survey. This informative survey series can be accessed through the Department’s website https://www.gov.ie/en/collection/788135-credit-demand-surveys/. The survey also reports on the terms and conditions attached to bank loans including personal guarantees.

The SME Credit Demand Survey is based on a randomly selected representative sample of 1,500 SMEs. The sample error for a survey of this nature is good and has a margin of error of +/- 2.66%, at a 95% significance level.

The following table sets out the overall percentage of applications that required collateral with a percentage breakdown of the type of collateral for each survey. It should be noted, for comparative purposes, the survey to March for each year was selected.

 

2014

2015

2016

2017

2018

2019

Percentage of applications requiring collateral

43%

49%

33%

45%

39%

39%

Buildings

15%

14%

10%

12%

10%

12%

Land

6%

9%

 

6%

8%

8%

Personal assets of owner

14%

8%

10%

7%

7%

8%

Machinery & Equipment

4%

8%

6%

8%

7%

5%

Accounts receivable

N/A

3%

3%

3%

2%

4%

Inventories

2%

1%

N/A

N/A

N/A

N/A

Other

3%

6%

2%

18%

12%

12%

Percentage of applications requiring no collateral

57%

51%

67%

55%

61%

61%

The following table sets out the percentage of loan applications that required a personal guarantee.

 

2014

2015

2016

2017

2018

2019

Percentage of loan applications requiring a personal guarantee

44%

46%

45%

28%

47%

50%