Opposition input into credit debate worthless
Pensions and cash on deposit are two sources of potential funding for SMEs, says Willie O'Dea
Back in April I wrote here of our need to seek other sound and reliable sources of credit and suggested a specific way to achieve this by allowing business owners to temporarily tap in to their own personal pension funds to source much-needed working capital without any tax penalty.
At the time I spoke of the urgency of the situation and the desirability of our reaching a position where credit bears a more normal relationship to GDP and the deposit base. If this was achieved, I argued, then the total domestic credit from Irish banks might get back to about half the level reached at the 2008 peak.
The urgency of the credit situation has increased dramatically if the latest survey on bank lending by the European Central Bank is correct. It has found that banks expect demand for credit to surge by almost 30pc in the current three months -- but the supply of credit is expected to fall by 5pc.
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