Government 'not totally happy' with bank lending
THE GOVERNMENT will be surveying the experiences of small businesses before meeting the banks to discuss their lending policies.
Appearing before the Oireachtas Committee on Enterprise, Trade and Employment, Enterprise Minister Batt O'Keeffe said the Government was "not totally happy" with certain aspects of plans put forward by the banks in relation to SME lending.
Staff from his department will survey small and medium enterprises (SMEs) in an effort to gauge their experiences with the banks this summer before the minister meets with financial institutions to discuss their lending practices.
Last month Mr O'Keeffe met with senior executives from the country's main banks to discuss lending and they presented him with a plan to increase loans to SMEs.
This week has already seen the Irish Bankers Federation defending the industry's lending practices after a survey by small firms group ISME showed that over half of all credit applications by SMEs were rejected.
Contrary to this finding, a report on SME lending by the accounting firm Mazars, for the Government, found that around 20pc of credit applications were rejected.
Mr O'Keeffe gave more detail on a loan-guarantee plan he hopes to have approved by Cabinet before the summer recess.
"It will be aimed at businesses in particular sectors that historically have difficulty attaining credit. For example, a hi-tech company with few assets."
Mr O'Keeffe also reaffirmed his plan to review the role of county enterprise boards (CEBs).
"CEBs have been a tremendous success and I don't plan to do away with them but the fact remains that there is nobody monitoring the output of CEBs and staff levels vary significantly," he said.
In response to a question from Fine Gael's Deirdre Clune on rationalising government agencies in the wake of the McCarthy report, Mr O'Keeffe said that some of the reductions recommended in that report were not feasible.
"We cannot see appreciable savings from merging of the Health and Safety Authority with the National Employment Rights Authority . . . while we have looked at merging the Takeover Panel with the Competition Authority and have found this would not be in line with international best practice," he added.