Credit for SMEs a strict condition of Banking Recapitalisation Plan
Explicit conditions to support the enterprise sector and free up credit for small to medium sized enterprises is included in the Government’s Banking Recapitalisation Plan announced this week, according to local Fianna Fáil TD Niall Blaney. 31/03/10“The provision of credit to viable businesses has been a serious concern for the Government for some months now. Local businesses, and particularly, SMEs, are important local employers and they have an essential role to play in our economic recovery.”
“The banks have now been rescued by the taxpayer in the Banking Recapitalisation Plan following appalling lending decisions over the last number of years. The same mistakes will not be allowed to happen again.”
“I am glad that, in return for their recapitalisation, the Government has imposed strict lending targets on AIB and Bank of Ireland.”
“Both Bank of Ireland and Allied Irish Bank will be required to make more than €3 billion available in new SME lending to include working capital this year and next year.”
“This figure will be reviewed on an ongoing basis as the needs of the economy changes.”
“The two banks must also produce a plan that includes a sectoral and geographical breakdown of how they intend to divide up this lending.”
“Both banks will also have to make €20 million each for Seed Capital to Enterprise Ireland supported ventures and will each set up a fund of up to €100 million for Environmental, Clean Energy and Innovation projects.”
“They will also be required to commit resources to work with Enterprise Ireland and the Irish Banking Federation to develop expertise in growth sectors and develop new credit products where cashflow is the basis for lending rather than property or assets.”
“I also want to welcome the appointment of credit reviewer John Trethowan. He will give an independent review of decisions by participating institutions to refuse of withhold credit to SMEs, farm businesses, and sole traders.”
“The figures involved in the Recapitalisation Plan are staggering and no one wants to be in this position. However, we have to support our banking system. Without it our entire economy would be in danger.”
“In light of this, I am glad that the Minister for Finance Brian Lenihan TD has imposed such strict conditions on lending to businesses. It’s only right that the banks who benefit from the taxpayer’s support play their part in supporting SMEs, fuelling the economy, and sustaining and creating employment,” concluded Niall Blaney TD.
