Since the crash there have been many complaints that SMEs in particular were disadvantaged as the Irish banks shrunk their lending and closed lines of credit.
Those concerns led to the Government setting up a Credit Review Office at the height of the crisis.
Now, the Central Bank plans to give SMEs more protections, introducing rules for banks that amount to a charter for SMEs.
The rules include pledges that lenders will provide transparency about the progress of loan applications and will provide greater protections for small business owners when they personally guarantee their loans.
“The regulations require [lenders] to contact borrowers who are in arrears for 15 working days, in order to identify the reason why,” said the bank’s director of consumer protection, Bernard Sheridan.
“This will allow them to assess whether the SME borrower’s circumstances are such that the requirements placed on firms for dealing with borrowers in financial difficulties should apply to that borrower.”
The rules will also provide SME borrowers access to an appeals process to query lending decisions. “SME borrowers in danger of being classified as not co-operating must be provided with a warning,” Mr Sheridan said.
The new rules should mean that lenders will provide reasons for declining credit, in writing; that SME owners get greater protections for guarantors; that SME borrowers are contacted after arrears of 15 working days; and that SME borrowers are provided with warnings if they are in danger of being classified as not co-operating.
Business group Isme said it hopes the rules would satisfy the complaints its members have raised in their dealings with the banks.
“It is hoped that these changes will make banking for SMEs now more transparent,” said chief executive Mark Fielding.
“The over-reliance on the use of personal guarantees is, in many cases, overkill and their use is unjustified.”
Business groups have longed campaigned against the use of personal guarantors. However, whether the rules will lead to banks providing more credit to SMEs remains an open question.
Former Central Bank governor Patrick Honohan last month acknowledged that small businesses were being starved of credit.
In a speech to the Small Firms Association, Mr Honohan suggested that more entrants into Irish banking will provide new sources for business loans.