Small business group, ISME last night gave a “guarded welcome” to the Government’s recapitalisation plans.
Head of research Jim Curran said a confirmation from the banks that they will increase lending to small firms by 10% is a “welcome start” but he added the Government must act immediate to help firms.
According to the recapitalisation plans the banks have committed to public campaigns to actively promote their lending to small businesses.
The Government’s plans show that banks will be required to offer annual review meetings, to inform customers of the basis for decisions made and to have written procedures for the proper handling of complaints.
“Where a customer gets into difficulty the banks will seek to agree an approach to resolve problems and provide reasonable time and appropriate advice,” the department of finance said last night.
The recapitalised banks have also agreed to work closely with the IDA,Enterprise Ireland and with state agencies to “ensure the supply of appropriate finance to contractors engaged on major projects sponsored by them”.
The banks have also vowed to each provide e15m to a new seed capital fund with Enterprise Ireland and have also committed to agree to prompt payment rules requiring payment within 30 days and an interest charge on late payments.
Employers union IBEC said the move will have a positive impact on the ability of businesses to acquire finance.
Director general Turlough O’Sullivan said: “Recapitalisation will boost confidence and sends a positive message.
“The Government must now divert some of the resources away from the National Development Plan to help firms under pressure, so that the haemorrhage of job losses can be stemmed.”
Bank of Ireland said the measures will enable it to play a “full role in supporting our customers and aiding economic recovery”.
AIB chief executive Eugene Sheehy said he believes the e3.5bn recapitalisation will be enough for the bank.