Credit Review Office proves help still at hand in obtaining loans for farm sector
One in 10 cases being considered by the Credit Review Office (CRO) are farmers, according to one of its directors, John Trethowen.
The CRO was set up in the wake of the banking collapse to help businesses with legitimate cases to access credit. In its first six months of operation, it has succeeded in securing €3m of additional credit facilities for around 120 businesses that were repeatedly denied extra loans from the banks.
"We are seeing that both banks and bankers are frightened about lending at the moment," Mr Trethowen told farmers at a Teagasc dairy conference in Athlone.
"They got it so badly wrong during the property bubble that they are scared stiff of making more mistakes in the future.
"As a result, the younger bankers in particular are taking a very rigid approach to any lending decision. We believe that by looking at businesses in different ways, it is often possible to still grant loans in a sensible way.
"We've dealt with 15-20 cases relating to farmers," he said.
"About 50pc of the applications that we receive are successful. A good portion are contractors who have amassed a series of bad debts. The rest tend to be farmers who got into ancillary enterprises, especially the ones that were connected with the building trade."
The CRO considers all kinds of loan applications up to €500,000 in addition to monitoring banking strategy.