Group set up to help firms secure credit attracts just 12 responses
Published 05/01/2010 | 05:00
The group set up by Tanaiste Mary Coughlan to help small businesses access desperately needed credit from the banks has attracted only 12 responses from the hundreds of thousands of small firms in the country and has met only four times since its establishment in May.
The Irish Independent has learned that the Credit Supply Clearing Group, which includes all the main banks, only met in May, July, September and October.
ISME estimates that there are about 230,000 small businesses in the country, but, despite widespread evidence of a credit drought, only 12 firms have used the service set up by Ms Coughlan's officials last year.
Ms Coughlan's officials set up a special email link in August calling for submissions from "viable businesses" who had been refused credit by banks.
Firms who believed their applications had been unfairly blocked were asked to send their details to the special email link, where further investigations could be undertaken.
However, there seems to be little awareness of the minister's service or the work of the group, which includes representatives of AIB, Bank of Ireland, Ulster Bank, ISME, the Irish Farmers' Association, the IDA and the Irish Banking Federation.
The group, which also includes civil servants from Ms Coughlan's Department of Enterprise, has not produced a single report for the department on action to improve the credit flow to small- and medium-sized enterprises (SMEs).
A request to get copies of the committee's minutes by the Irish Independent was turned down.
In December, a government report queried the level of loan refusals issued by the main banks, saying the banks were not reporting them "on a consistent basis".
The rate of loan refusals to SMEs may be almost a third higher than official bank figures suggest, according to a report by Mazars, the accountancy firm.
One of the tasks of the Credit Supply Clearing Group is to get a better picture of the number of refusals and the reasons underlying them. However, how much progress the group has made is unclear.
The department said just before Christmas it could not disclose the proceedings of the group because its operations were based on "confidentiality".
It is not clear how the group will develop a picture of what is happening between banks and SMEs considering the low level of response to date from firms around the country.
The group, unlike other government committees, does not take minutes during its proceedings. Asked why this was so, the department said that "informal internal notes" were taken instead by department officials, but were not circulated to the group itself.
When set up, Ms Coughlan said the group would be responsible for "identifying specific patterns" where viable projects were blocked or credit starved. Ms Coughlan said the group would build "upon the actions taken by the Government to stabilise the banking sector and ensure the banks meet their commitments".
The group has 35 members, with 14 of the members either executives from the banks or representatives of the Irish Banking Federation. No expenses were incurred by the group apart from the cost of refreshments, the department said.