ALMOST HALF of small businesses have been refused bank credit in the last three months, according to a Bank Watch survey by industry group Isme. This finding follows a Central Bank report which last month claimed Ireland was second only to Greece in terms of refusing loans to small businesses, a claim rejected by the Irish Banking Federation.

According to the Isme survey, published yesterday, 49 per cent of respondent firms said they had been turned down for credit in the last three months.

A further 16 per cent did not apply for bank credit despite the fact that they required it. Some 38 per cent of these firms feared a reduction in their existing credit facilities, while a quarter were afraid of being refused. A further quarter said they were discouraged by their bank from making a loan application.

The survey was carried out last week and attracted 862 replies.

Isme chief executive Mark Fielding said that Ireland’s high rejection rates could not be explained away by banks and “their PR machines” as being due to “weak demand and poor quality of applicants”.

Isme called on the Government to demand full disclosure from rescued banks on their lending to small and medium enterprises (SMEs).

Mr Fielding said: “If the banks are refusing to play their part they should be either forced to do so or alternatives need to be immediately put in place to ensure that we continue to have an SME sector.”