Banks not making credit available, says accountancy body

A survey of its members by The Institute of Certified Public Accountants in Ireland (CPA) has supported the findings of ISME’s Bank Watch Survey launched today.

In the CPA report, 89% of respondents said they are seeing viable businesses getting into trading difficulties because of a lack of credit from their banks.

The overwhelming majority (94%) said they have seen an increase in the incidence of clients being refused loans or having existing credit facilities removed.

It was also found that 70% said that banks are not open for business from the SME sector.

"No bank is taking on business from another bank at present so there is no competition when it comes to negotiating better credit terms," said CPA president John White.

"Many banks have also increased their margins on any loans that are up for review thus eroding the benefit of falling interest rates to the customer from a cash flow perspective.

"The Irish taxpayer has provided significant cash resources to our main banks and is underwriting many billions through the creation of NAMA. It is farcical that these same banks are now unable to provide credit to the sector which will be at the centre of our recovery."