Data on loans to SMEs to be made available by Central Bank

THE CENTRAL Bank is to begin publishing data on the level of lending by Irish financial institutions to small and medium enterprises (SMEs) by the end of the year, it confirmed yesterday.

The Central Bank collates data from Irish financial institutions on a quarterly basis, outlining the outstanding amount of loans to SMEs and the value of new lending by sector of economic activity.

However, this data is not published separately by the bank and is instead merged with data on lending to other corporates.

The Central Bank will now publish SME-specific data on a quarterly basis “once the data is deemed to be of sufficient quality”, it said yesterday. It is expected this will be towards the end of this year.

The information will be presented on an aggregate basis, and will not provide SME lending data for individual banks.

Meanwhile, the Department of Finance said any future Mazars report on bank lending to businesses will include a customer survey on lending to assess the demand as well as supply aspects of credit availability, an aspect absent from the last Mazars report.

The department said it does not envisage another report until autumn 2010 at the earliest.

The developments come as the Irish Banking Federation (IBF) yesterday strongly rejected claims by Isme, a representative body for small and medium-sized enterprises, that banks are not lending to the majority of small business customers. According to an Isme survey, 55 per cent of companies that applied for funding in the last three months were refused credit by their banks.

The same survey found that 82 per cent of firms said banks were “making it more difficult for SMEs to access finance”.

The survey was based on responses from 834 Isme members. Some 4,000 members were contacted for the quarterly survey.

The survey also found that 42 per cent of respondents said the issue of providing the family home as collateral had surfaced during discussion on business loans with banks, with 12 per cent indicating that their bank had made the request.

The IBF said that it “seriously questions the representativeness and accuracy” of Isme’s research.

According to the IBF, the Mazars report on lending, published in April, is “the only reliable study into bank lending”.

The Mazars report found that eight out of 10 credit applications were being approved, bringing total credit outstanding to the SME sector to €32.2 billion.