Just 34% of SME loans are ‘new’

Bank of Ireland and AIB remain on track to achieve their €4bn SME loan approval targets for 2013, but of the amount sanctioned to date only 34% qualifies as new lending, the Credit Review Office has stated.

In its 12th progress report, published yesterday, the CRO — which was established three and a half years ago to monitor the flow of bank credit to small firms — said the pillar banks continue to lend to low-to-medium risk credit applications. However, CRO head, John Trethowan, said that credit conditions remain tight and appeal requests are rising.

Since its establishment, the CRO has found in favour of 55% of appeals made by firms who feel they were unfairly refused credit by the banks. This, it said, has resulted in €18.5m of credit being made available to SMEs and farms, helping to protect and/or create 1,521 jobs in the process.