Small businesses are still struggling to access credit, with more than half being rejected by banks in the past three months.
A survey by small business representative group Isme said an increasing number of companies were being refused credit by the banks, with the number rising to 54 per cent from 48 per cent in the previous quarter.
Some 72 per cent of firms and traders it spoke to believe banks are making it more difficult for them to access finance, down from 79 per cent, and 14 per cent claimed they had been forced to accept changes to banking facilities in the last quarter. This included rising interest rates, and reductions in overdrafts.
Those who successfully increased credit facilities with banks found they required increased collateral, while others were forced to pay higher rates and charges.
Isme is asking Minister for Finance Michael Noonan to order banks to produce a complete and accurate figure of new and increased SME lending.
"The results of today's survey clearly show that the problem of reduced access to credit for SMEs has returned to the worst figures since the crisis began, contrary to the claims of the cheerleaders from the banks, who claim that credit is plentiful," Mark Fielding, chief executive of Isme, said.
"It should also be noted that a recent survey by the Central Statistics Office confirms that only 55 per cent of companies who applied for bank credit were successful in getting full approval. It is time that the discredited banks came clean and admitted their real refusal rates."
Isme's survey was carried out in the week ending June 10th and includes responses from 882 sole traders and small firms.
The Irish Banking Federation (IBF) criticised the results of the ISme survey, saying it did not provide a "complete or accurate account" of the demand for credit.
The group, which represents the financial services sector, cited the quarterly report from the Credit Review Office, which found that loan approval rates for the banks covered by the reports were 88 per cent, and the Central Statistics Office's recent report on access to finance covering 2007 to 2010, which indicated that 74 per cent of loan applications were fully or partially approved.
"It is important that the focus remains on the full facts at all times and that we have regard to the realities of the marketplace," said IBF chief executive Pat Farrell.
"While fully cognisant of the need to support the SME sector as a key driver of our economic recovery, the ongoing consideration for all lenders must be the viability and thus the bankability of the credit applicant."
