Exporters trade group 'has no faith' in credit review body
Chief executive says members unlikely to use CRO for help
THE head of a leading trade group said yesterday his members had "no confidence" the Credit Review Office (CRO) can improve credit access for small business.
Irish Exporters Association (IEA) chief executive John Whelan said the CRO acted too slowly and there was little expectation of success among his members if they applied to it.
A survey, which the IEA released last night, found that more than half of Irish exporters would not apply to the CRO if they were refused a loan by their bank, with most either unaware the CRO existed or doubtful that it works properly.
The number of exporters who have experienced difficulty in accessing credit has increased by a factor of 10 since 2008 but Mr Whelan said his members were still unlikely to go to the CRO.
"You have to remember that for a business to go to the CRO in the first place, it urgently needs the funds for wages and other essential business functions," said Mr Whelan.
"Our members who have approached the CRO to have their loan applications reviewed feel their requests have not been met with the urgency they feel their application merits," he added.
Head of the CRO John Trethowan said he "absolutely disagreed" with Mr Whelan's sentiments, however.
"John Whelan has never spoken to me so I would like him to bring these concerns to the CRO," he said.
"There is certainly no lack of urgency on the CRO's part when we are reviewing applications. As an example, we received two applications last Friday and we worked through the weekend to have the opinions ready for Monday. Loan requests cannot be taken lightly so the CRO has to be very careful when reviewing them.
"By our very presence, we have seen the banks refine their lending practices and there is no doubt that we have been beneficial to small business."
Mr Whelan was speaking at the launch of the IEA's Export Ireland and International Trade Finance Review for 2010, where he called for a government-backed credit insurance scheme in order to ease credit access. Only 15pc of exporters who responded to the survey now have credit insurance.
As well as the difficulties surrounding credit access, the survey also found that the vast majority of exporters want Ireland to stay in the euro for the sake of their business.
Unsurprisingly, 90pc of transactions in the eurozone are carried out using the single currency but more than a third of deals conducted in the UK are now also euro based. Only 60pc of transactions there are now carried out in sterling.
Overall, sterling now accounts for only 12pc of transactions worldwide -- barely a third of 2008 levels when it was used in 31pc of transactions.
Despite the country's difficulties, the growth in exports looks set to continue.
Total exports increased by 9.3pc between July and September, and 62pc of exporters believe they will increase their foreign business this year compared to 2009, while nearly two-thirds of exporters say they have targeted new markets in 2010.