Loan costs for Irish SMEs may have worsened

Irish banks continue to charge Irish small firms the highest interest rates in the eurozone, with a new Central Bank report suggesting the problem may have gotten worse for many SMEs, despite wholesale funding of banks resting at rock-bottom rates.

The duopoly of the Irish banking system since the two main general Irish lenders were bailed out at huge expense during the financial crisis has long been called out by business groups.

But the latest report on SMEs — which the Central Bank publishes twice a year — reveals most Irish small and medium-sized firms saw little change in their interest charged for their new loans from the previous survey, while “significantly more” firms across the eurozone as a whole reported the cost of their loans had fallen.