AIB credit approval to small business up by 52%

AIB

approved €5.6 billion in credit to Irish SMEs in the first 11 months of this year, according to latest data from the bank. This was 52 per cent ahead of same period in 2013.

In November, the bank approved €586 million in loans to SMEs. AIB said that the increased demand was fuelled by the recent uplift in economic activity and improved business and consumer confidence.

This has been evident in a number of sectors, particularly agriculture, transport, retail and hospitality.

The bank said farmers, particularly in the dairy sector, are investing in their operations before the planned removal of milk quotas in 2015.

In transport, light commercial vehicle registrations were up 52 per cent year on year and heavy goods registrations were up 20 per cent as operators replace their fleets.

In retail, investment in existing and new operations in the convenience retail sector has been taking place. A significant increase in foreign visitors is prompting investment in existing hospitality operations. There has also been an increase in the purchase and sale of pubs and hotels.

Construction activity

uplift AIB said there was also an “uplift” in construction activity in the residential and commercial real estate sectors. “This activity is in response to the underlying shortage in the supply of properties,”

it added.

AIB launched a series of SME funds this year to stimulate demand through the availability of funding for investment and working capital.

It launched a €500 million agri fund in April and by the end of November about €250 million had been used.

Residential property fund In addition, the bank established a €350 million residential property fund in February. It said this

had an “active pipeline” of more than €170 million in “customer projects”.

AIB also opened a €200 million export fund in June. By the end of September, it had approved about €25 million in export finance.

And it established a €200 million energy fund to support the investment in renewable energy such as wind farms. By the end of November, €80 million of credit had been approved for projects.

"These approval figures are a reflection of the increasing demand for credit across the economy," said AIB head of business banking Ken Burke.

“AIB is optimistic about the outlook for the broader SME sector. We are backing SMEs who have persevered during difficult times and we have been rolling out a series of initiatives to support our customers such as delivery within 48 hours of credit decisions for SME loans up to €30,000.’’