A CALL has been made in the Dáil for the Taoiseach to put pressure on the banks to lend to small- and medium-sized businesses.
Labour leader Eamon Gilmore said these businesses were being told by banks not to bother applying for funding. Referring to a survey by Isme, which represents smaller firms, he said 55 per cent of 834 businesses said they had been refused credit in the past three months.
Isme had accused the banks of “putting thousands of businesses and their employers at risk. It reports that banks are illegally requesting family homes as collateral for the extension of credit.”
He said businesses “are not even getting past the front door of banks” and if they do most have their applications rejected.
“They are told not to bother, they are told to go away” and “as soon as they see the bank manager or the bank official, they are sent packing with a flea in their ear”.
He added: “Time and again the banks have got the money and they’re not going to give it back.
“And having got the money, having got the commitment from the taxpayer, the Government should now be in no uncertain terms telling the banks that they have to lend.”
Taoiseach Brian Cowen told him that “the purpose of the recapitalisation of the banks was to provide adequate capital for the banks.
“It wasn’t so that money was handed out, as you know – and if you don’t know you should.”
He said the purpose “was to provide sufficient capital in the banks so they could access funds for the purpose of providing credit”.
Mr Cowen said the two main banks, AIB and Bank of Ireland, had been asked to provide €3 billion for new and increased credit facilities in 2010 and 2011.
“That has not yet been met as far as the Government is concerned and we continue to engage very directly with those banks.”