Sir, – Your Editorial on supporting enterprise is right on target (October 9th). The Irish banking market is characterised by an absence of competition, lenders with impaired balance sheets and a weak economy. There is an imbalance in the system that does not support recovery.
The new venture capital structures part-funded by the National Pension Fund have a very narrow target market. They will not solve the problem. We have a handful of banks operating in the local market and no finance companies. Where Ireland is now is no different to where the UK found itself before the second World War, with a lack of funding for SMEs. The financial entity they set up to address the problem interestingly owned in the main by the UK banks became the largest provider of growth capital for SMEs in the UK by the 1960s. We need a financing vehicle with an ethos similar to the Irish company, the Industrial Credit Corporation with a mandate that covers enterprises operating in the domestic as well as overseas markets.
Pressurising our banks to lend more money to companies that are struggling to survive is not the solution. They need support but not necessarily, as the Central Banks suggests, with more bank borrowing. – Yours, etc,
JAMES DEENY,
Rostrevor Road,
Rathgar, Dublin 6.