ISME hits out at ‘skewed’ surveys
Mr Fielding said that the “dogs on the street” know that Irish banks are not lending to SMEs. He said ISME’s latest quarterly banking credit survey simply confirms the findings of surveys by the Institute of Certified Public Accountants, Cork Chamber and the European Central Bank. The ECB placed Irish SMEs as second least successful, after Greece, in obtaining bank finance.
Some 92% of ISME members surveyed said the Government is having no impact on bank lending. Of those who were refused loans, 88% have been in business for over five years while 42% have been in business for more than 20 years.
“These are not fly-by-night businesses. They are viable yet vulnerable businesses that have come through prior recessions, but they did so at a time when the banks were open for business, which is not the case now,” Mr Fielding said.
“There is a massive lack of expertise in the banks. These bankers spent the last 15 years giving out loans backed by property, but they are incapable of assessing loans on the basis of the value of a business.”
The Irish Banking Federation (IBF) wants ISME to submit its survey methodology to independent scrutiny. The IBF said that a recent Mazars survey for the Department of Finance offers a more reliable and comprehensive picture.
IBF chief executive Pat Farrell said: “It is important that we have reliable and accurate data with which to work. Anything less than that does a disservice to all concerned and particularly to the small business sector itself.”
Mr Fielding said: “Irish businesses need finance not skewed banking credit surveys. There is an awful lot of pressure being put on the Government and on civil servants to say that there is credit available.
“When the bankers say that nine out of ten loans are being granted, those figures exclude loan decisions which have been deferred. Some people are being deferred for over two months, while by the letter of the law, they should get a decision within 15 working days,” he added.
“The figures cited in the Mazars report included farmers, who are getting loans to beat the band. That is distorting the figures. The figures also don’t include people whose loans are refused over a phone call, or people who back off from filling in a form when they’re asked to put up the family home as a guarantee,” Mr Fielding said.
He claimed that the bank-backed surveys also categorise as ‘approved’ those loans where the business owner has turned down the offer of, for instance, a €10,000 loan when they have asked for €15,000.
He said the banks also bump up their loan approval figures by categorising the re-financing of existing borrowings as newly granted loans.
