Friday 20 January 2017

Banks 'must start lending to firms'

Published 23/06/2010 | 14:24

Eamon Gilmore has urged the Government to ensure that banks lend more
Eamon Gilmore has urged the Government to ensure that banks lend more

The Government has been warned it must order banks to start lending to smaller businesses fighting for survival in the credit squeeze.

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Labour leader Eamon Gilmore said more than half of traders around the country are being snubbed by lenders that were bailed out by taxpayers.

Despite being handed billions of euro from the public purse on the condition they help keep small and medium-sized firms afloat, most businesses are being turned away at the bank doors, said Mr Gilmore.

"They're told not to bother, they are told to go away," he said. "They don't even see the bank manager or officials - they're sent packing with a flea in their ear."

Mr Gilmore referred to a survey by Isme - which represents thousands of small and medium-sized enterprises - which showed 55% of their members were refused credit in the last three months.

The banks' "two-fingered response" to repeated demands they start lending again is putting thousands of jobs at risk, the Labour leader warned.

"Let's get this straight, the banks have got the money and they're not going to give it back," he said.

"Having got the commitment from the taxpayer, the Government should now in no uncertain terms be telling the banks that they have to lend to small and medium-sized businesses - that's why they got the money."

Responding to criticism of the Government's role, Taoiseach Brian Cowen said the whole purpose of the recapitalisation was so banks could continue lending.

Mr Cowen said both the Bank of Ireland and Allied Irish Bank - the country's two main lenders - have been asked to provide 3 billion euro each for new or increased credit facilities this year and in 2011. "That has not yet been met as far as Government is concerned and we continue to engage very directly with those banks," he said.

Press Association

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