NEW Central Bank figures show lending to small business is down even as the main banks show signs of fixing their balance sheets.
Lending to Irish small and medium enterprises (SMEs) fell by almost 5pc in the 12 months to the end of September, according to the data.
The figures show a decline of €1.3bn in new lending to business compared to a year ago.
Lending was down for almost all types of smaller and mid-sized businesses. Lack of access to loans is one reason why the Government has prioritised SMEs in last week's budget.
The new Central Bank figures will fuel the controversy over lending targets that Bank of Ireland and AIB say they are meeting, but which in some cases include restructured or reissued debt.
While SMEs struggle to access credit, the banks themselves are showing signs of normalisation.
In the Dail, Finance Minister Michael Noonan said the bank guarantee could end before April, despite being extended for a year just weeks ago.
The comments came as figures show the reliance of the main banks on emergency funding from the European Central Bank (ECB) at a two-year low, after Bank of Ireland and AIB both raised money on the bond market in November.
Borrowing from the ECB dropped to €75.7bn in November from €78bn the previous month. Borrowing from the Central Bank of Ireland, mainly by IBRC, was unchanged at €40.7bn, however.
Mr Noonan said that the restructuring of the banking sector is not over yet.
As a result, emergency powers in place since the start of the financial crisis will be extended until the end of 2014, he said.
The Credit Institutions (Stabilisation) Act, gives the minister sweeping powers to impose conditions on banks and have been used to inflict losses on some lenders to subordinated bondholders as well as to merge EBS with AIB and Irish Nationwide Building Society with Anglo Irish Bank, now IBRC.
"We are getting out of this mess," Mr Noonan said. Extending the period of the emergency banking laws "is crucial to our being able to meet that objective," he said.