Former Bank of Ireland boss calls for independent institution for SME lending

Former Bank of Ireland boss calls for independent institution for SME lending

Former Bank of Ireland CEO Mike Soden has today called for the establishment of an institution which is independent to the banks should be set up to lend to SMEs.

It comes as the latest figures from the Central Bank show that one in four credit applications to banks for loans or overdrafts by small and medium enterprises is being rejected. Banks have disputed the findings of the report, however.

Soden said that an entity similar to the former Industrial Credit Company, which was set up to encourage investment in Irish industry decades ago, could be funded by AIB, Bank of Ireland and the Government to lend to SMEs.

Mr Soden said that this would be the best solution to the cash-flow problem for SMEs.

"It's not just the Government, it's up to people sitting around the table together and saying: 'What is the best solution?'," he said.

"The creation of an entity similar to the Industrial Credit Company that will focus specifically on SMEs, but don't provide the traditional day-to-day current accounts [would be preferable]."

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