ISME: Scheme should help 'marginal cases'

The Irish Small & Medium Enterprises Association has welcomed the establishment of the long-awaited government sponsored Credit Guarantee Scheme for businesses with less collateral available than required by the "now over-cautious rescued" banks.

The announcement by the Minister for Jobs, Enterprise and Innovation of the scheme will ensure that SMEs can now successfully apply for bank credit, where recently the banks were unable to issue loans due to their lack of expertise and risk-averse policies.

ISME Chief Executive, Mark Fielding, said: "While this initiative will not be the ‘silver bullet’ for all credit starved SMEs, it should get marginal cases across the line. We hope that this Government intervention in the broken banking system will initially assist in retaining and ultimately increase employment in the sector.

"Many of our ISME members have had to postpone investment decisions due to the banking market failure and this scheme will be a help to some vulnerable but viable SMEs and allow them to survive, consolidate and in time, expand, with the positive result of increased employment."

The association called on the Government to ensure "fair play" by insisting on tight control and monitoring of the scheme in the hands of the rescued banks, which in the past, they said, "have shown a tendency to bend the rules to their own advantage".

The association also demanded that banks educate their staff in the application of the scheme.