THE latest survey from the Department of Finance on lending to small and medium-sized companies is encouraging in places but very worrying in others.
These small and not-so-small companies are the life blood of the economy. About half of the private sector workforce, or 655,000 people, are employed in the country's 200,000 small companies. Even if we work elsewhere, we all know people who work in small companies or own them. Their importance cannot be overstated.
It is good news then that the percentage of credit applications from small companies that were approved by the banks rose slightly between March and September.
But it is disturbing that a quarter of small firms are not being told why the banks are turning them down, and unforgivable that companies have to wait an average of 29 days to be told whether their request has been approved.
While demand for loans from small companies is admittedly low, the fact remains that the banks are not lending. The Central Bank has shown this country to have some of the tightest lending conditions in Europe which is choking the private sector.
The Government has set AIB and Bank of Ireland a target of releasing funding worth €4bn a year each to SMEs. Much of that, however, has been tied up in restructuring old debts and is not "new" lending. These targets, while welcome, are too abstract and can be too easily fudged. The banks now need to be given hard, specific targets that will make them accountable.
Only then will we truly believe them when they say they are "open for business".