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Credit Availability

Dáil Éireann Debate, Tuesday - 27 March 2018

Tuesday, 27 March 2018

Ceisteanna (201, 208)

Bernard Durkan

Ceist:

201. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which adequate working capital remains available to small and medium-sized enterprises with particular reference to the need to ensure the protection of jobs in the indigenous sector; and if he will make a statement on the matter. [14232/18]

Amharc ar fhreagra

Bernard Durkan

Ceist:

208. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that the main banks are making adequate resources available to facilitate the house building programme; and if he will make a statement on the matter. [14239/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 201 and 208 together.

Supporting the availability of finance for SMEs 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 have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. In this regard the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future funding needs of SMEs.

In terms of monitoring the working capital and other requirements for SMEs, my Department biannually surveys the demand for credit by SMEs.  I would draw the Deputy's attention to the Department of Finance SME Credit Demand Survey just published, covering the period April to September 2017, which can be found at www.finance.gov.ie.

The results of this survey show that, when pending applications are excluded, 88% of credit applications to banks were approved or partially approved. Working capital/cash flow requirements are provided as the main reason for applying for bank finance with 38% stating this is why they requested bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 81% of working capital coming from this source (up 8%) since Sept. ‘16.

Also, the latest publication of the Central Bank’s Trends in Business Credits and Deposits which can be accessed at

https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/business-credit-and-deposits recorded an increase in new lending to the construction sector.

Further, AIB has stated that construction, "is of strategic importance for the economy and the bank. AIB is strongly supportive of the industry and we are ready and willing to increase our support as the industry grows. We are the main bank to many of the largest developers but also we have a strong focus on mid-sized developers. We created a new dedicated team in 2017 to serve mid-sized development groups following feedback from the industry that they struggled to get the attention of mainstream banks. Overall we have more than doubled the Bank’s Development Lending Team over the last twelve months".

The Government remains committed to the SME sector and larger businesses which it sees as a key engine of ongoing economic growth. I can assure the Deputy that my Department, working with other relevant Departments, Bodies and Agencies, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish business have sufficient access to finance.

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