Irish SMEs ‘too reliant on bank funding’

Irish SMEs are among the most heavily reliant on banks for funding, although since the financial crash there has been a move to trade credit and equity for working capital.

“This helps provide context to the debate around SME credit policy, in showing that the indigenous private sector, is and has been, disproportionately exposed to weakness in the banking system, relative to other European countries,” according to the Central Bank.

The findings are in a study of SME funding in 2005 and 2012 by Central Bank economists Martina Lawless, Fergal McCann and Conor O’Toole.