Donohoe to quiz banks over warning branch closures hitting loans to firms
Finance Minister Paschal Donohoe says he's seeking a briefing from banks about the impact of branch closures on business lending.
It comes in the wake of damning criticism from the head of the Credit Review Office who said banks no longer make the effort to get to know small and medium-sized firms when they apply for loans.
John Trethowan said bank officials are making loan decisions sitting behind desks rather than face-to-face, and warned the closure of bank branches across the country could be the cause of lower demand for SME lending.
Mr Donohoe said there are "important points" within the Trethowan report on which both he and the banks need to reflect.
"We have to get the balance right between having branches present within communities to allow direct engagement between them and potential customers, and the work that banks have underway to try and make themselves more efficient," Mr Donohoe said. "In the engagement that I am going to be having with banks across the coming weeks and months, this is a matter I'll be raising with them."
Mr Donohoe was speaking at the official launch of the Government's €300m Brexit Loan Guarantee scheme. The aim of the scheme is to provide working capital at rates of around 4pc to small- and medium-sized businesses that are either impacted by Brexit, or believe they will be in the future. The scheme is being operated via the Strategic Banking Corporation of Ireland (SBCI), through AIB, Bank of Ireland and Ulster Bank.
The State, in conjunction with the European Investment Bank, will provide the guarantee for the loans, rather than liquidity.
Business Minister Heather Humphreys said the Government is working with the European Investment Bank on a longer-term loan scheme for businesses affected by Brexit.
"Currently banks lend out to approximately seven years so we're looking at a longer term than that, and it's something for capital investment targeted at businesses that are going to be impacted by Brexit," she said.