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Eighth Quarterly Review of the Credit Review Office Published

Credit Reviewer John Trethowan today published the eighth quarterly review of the Credit Review Office. The report outlines the activities of the Office since his last report at the end of February, and also highlights his observations on the market conditions in the SME sector.

Commenting on the market conditions observed over the period Trethowan said:

I observe that the two pillar banks are largely being supportive of medium and low risk new lending proposals from well established SMEs and farms which already bank with them. However, I am disappointed that there is not more evidence of support for ‘enterprise risk taking’ on new and increased lending in the banks’ current lending policies.

The challenge for banks is to develop approaches which can provide credit for all viable businesses within the SME sector to ensure they fully support a recovery in the economy.

Trethowan added:

Over the past three months the Credit Review Office has received 44 applications from SME’s who have been refused Credit by AIB and Bank of Ireland.

Work is ongoing on 31 cases. Of the cases completed in this quarter, 17 bank refusals were overturned resulting in the two banks subsequently supplying €2.0M of credit, supporting a further 140 jobs in the SME sector.

Since the Office’s establishment in April 2010, 197 appeals have been received. Of the cases completed, 69 of these refusals were overturned resulting in the banks subsequently supplying €6.9M of credit, supporting 683 jobs in the SME sector; 48 of the cases have been upheld in banks’ favour.

Minister for Small Business John Perry welcomed the report saying:

The Credit Review Office is a vital independent service for SMEs that works towards ensuring that businesses with existing or future potential viability can gain access to credit.

Small businesses are currently operating in a particularly difficult environment, so it is important that we continue to focus on delivering a practical programme of actions that can achieve positive improvements in the operating environment for small businesses. Part of this programme is the important role that the CRO plays in ensuring viable SMEs have access to credit. The fact that the CRO has overturned 69 bank refusals and supported 683 jobs since its establishment emphasises its significance for the SME sector.