Brian Hayes MEP has today said that discrepancies between Irish data and ECB data on SME lending need to be investigated to give Irish businesses a clearer picture of current lending conditions.
“I have made contact with the ECB to seek clarification on discrepancies between ECB data and Irish data on lending to small and medium sized businesses.
“The ECB’s survey of lending to businesses, published this week, says that 25% of SMEs in Ireland reported an increase in bank lending rates while figures from the Red C credit demand survey claim that 84% of SMEs have reported an increase or stabilisation in trading conditions.
“From these different results, it is not clear whether Irish SMEs are reaping the benefits of the low interest rate environment or if they are being hampered by costly borrowing. As with variable mortgage rates, banks should be reducing their rates for business lending given the fact that the ECB’s main interest rate is at an all-time low of 0.05%. We should remember also that it has been almost three months since the ECB started its Quantitative Easing programme, we need to start seeing the real benefits of QE trickling down to SMEs.
“Figures from the Central Bank of Ireland from December 2014 show that overall lending to SMEs in Ireland has increased from €1.9 billion to €2.1 billion over a one-year period.
“While it is very positive that banks have increased their capacity to lend to businesses, we still need a clear picture on the rates and the conditions attached to SME loans. SMEs are the backbone of our economy and we need to be working towards an environment which supports and encourages the growth of SMEs as much as possible.”