TDs criticise report on lending

MEMBERS OF the Oireachtas Joint Committee on Economic Regulatory Affairs yesterday criticised the findings of a report into lending to small and medium enterprises (SMEs) as unreflective of the reality facing small- and medium-sized businesses.

The committee was reacting to a presentation on the third Mazar’s report on lending to SMEs published in April. Dera McLoughlin, partner of Mazars, an international accounting firm, and author of the report, admitted the firm had experienced a number of limitations in relation to the collection of certain data.

Fianna Fáil TD John O’Donoghue said the report “does not reflect what is happening on the ground”. He said the fact the report only captured formal applications as recorded by the banks, thereby excluding verbal applications, meant that the report was “not an accurate reflection” of the reality facing small and medium businesses.

“Why is it that viable small businesses . . . are being stonewalled when it comes to accessing credit but the banks are saying that four out of five lending applications are being approved?” he asked.

Fine Gael TD Kieran O’Donnell questioned why, when the first Mazar report had uncovered limitations in the information provided by the banks, an instruction was not issued to the banks to ask them to record all relevant data from that point onwards.

“The problem is that the assumptions are so numerous that we’re not getting to the heart of the matter here,” he said.

The report found that two-thirds of lending to the small- and medium-sized business sector, representing €11 billion, were distressed, according to the information provided by Bank of Ireland, AIB, Ulster Bank, Anglo Irish Bank and National Irish, and collated by the Irish Banking Federation.