AIB to make €500m available for SME lending

AIB is making €500m available to lend to small businesses to support them through difficult economic conditions.

AIB is making €500m available to lend to small businesses to support them through difficult economic conditions.

The move is part of the bank's recapitalisation commitment to the Government to lend an additional €6bn to small and medium enterprises before the end of next year.

Each business will have to complete a viability plan and provide certain information to AIB to enable it to make a credit decision, before they can benefit from the scheme.

It is the first in what is expected to be a series of moves from Irish banks aimed at getting credit flowing for small businesses again, following talks between bank management and Enterprise Minister Batt O'Keeffe.

The Minister today insisted the announcement must be backed up by actual lending on the ground.

"AIB's move today is a welcome response to the meeting I had with the bank last week at which I stressed the need to provide working capital to viable small businesses amid reports that many of them are being stonewalled when it comes to accessing credit to keep going or to expand," Minister O'Keefe said.

"But the bank's pledge must be honoured - and this Government will accept nothing less.

"I want to see our banks, which have been rescued at enormous cost to the taxpayer, acting responsibly and in the best interests of small businesses so that we can create jobs in the domestic economy and advance our recovery as a nation.

"Small businesses employ some 700,000 workers here out of a total workforce of 1.9 million," Minister O'Keefe added.

"It is a sector I am determined to support."

The move was warmly welcomed by representatives of the SME sector.

“It is good news that the financial institutions are taking further action to address the real problems which their small business customers are facing," said Avine McNally, director of the Small Firms Association.

"Today’s announcement from AIB is very welcome as their proposed specific actions will assist viable small business with financial pressures to remain trading and sustain jobs.”

However, McNally cautioned that “the real test of success will be in the speedy delivery of the commitments to ensure small business survival”.

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